The Future of Audit : Keeping Capital Markets Efficient

Abstract

Concerns about the audit industry arose during Committee inquiries into Carillion and BHS and have deepened through a series of further high-profile audit failures. Questions around competition, resilience, conflicts of interest, regulatory weakness and the nature of audit itself have contributed to a crisis of trust in the industry. None of these problems are new; but previous attempts at reform have not delivered necessary improvements. The Government commissioned two independent reviews to look at regulation (Kingman) and the effectiveness of audit (Brydon), while the Competition and Markets Authority (CMA) has looked primarily at competition and resilience. Our recommendations feed into these reviews and indicate how reforms can be implemented in a coherent and timely manner.