KPMG UK responds to BEIS "Restoring trust in audit and corporate governance” consultation

• KPMG UK support the broad direction of these reforms and are pleased to see a recognition of the importance of audit alongside the need to strengthen the wider corporate reporting system.  

Responding to the Department for Business, Energy and Industrial Strategy’s consultation, “Restoring trust in audit and corporate governance”, Michelle Hinchliffe, UK Chair of Audit, KPMG, said:

“The UK has a world-leading reputation as an attractive place to invest and do business and it’s vital that any reform protects and bolsters this position. We support the broad direction of these reforms and are pleased to see a recognition of the importance of audit alongside the need to strengthen the wider corporate reporting system.  We welcome measures that enable the delivery of high-quality audits and better outcomes for investors and we have already taken action to implement some of the suggested reforms such as operational separation.

“In order to drive real change, establishing ARGA, with broader responsibilities, will be key, as will the introduction of a new framework for internal controls reporting. As seen in the United States, this can help drive reliable, higher quality, timely financial reporting and provide an early warning indicator for fraud. The introduction of a resilience statement is also one of the most important innovations in meaningful corporate reporting in decades and will give shareholders the information they need to understand the threats to a company's business model.

“However, given the scale of the proposed reform, significant implementation challenges remain. Prioritisation, sequencing, consistency and clarity will be key as this package of reform is rolled out.  In particular, proposals for managed shared audits create significant challenges to implementation and risk duplication of work, increased costs for businesses and possible difficulties in identifying an appropriate UK subsidiary to share. We have seen no evidence that they will have a positive impact on audit quality. However, we have previously offered to participate in a pilot and remain committed to help find solutions to these challenges.”

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For more information contact:

KPMG UK Media Relations Team: 0207 694 8773

Zoe Sheppard, Head of Media Relations, KPMG UK

Mobile:     +44 (0)7770 737 994

Email:      zoe.sheppard@kpmg.co.uk

About KPMG

KPMG LLP, a UK limited liability partnership, operates from 21 offices across the UK with approximately 16,000 partners and staff.  The UK firm recorded a revenue of £2.3 billion in the year ended 30 September 2020.

KPMG is a global organization of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 147 countries and territories and has more than 219,000 people working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.