UK - Company Audits Discussed by Hayvenhursts Accountancy Services

Business Secretary, Kwasi Kwarteng announced a major overhaul of the UK’s audit sector on 18th March 2021.

Hayvenhursts Accountancy Services is an Accountancy Business based in Cardiff that works across the UK and who as part of the Audit Reforms will be able to conduct a proportion of an audit on behalf of one of the Big Four Firms.

Major reforms to the UK’s audit industry are aimed at safeguarding British jobs, avoiding company failures and reinforcing the UK’s reputation as a world-leading destination for investment.

What is the Purpose of the Company Audit Reform?

The purpose of the reform is to stop the dominance of the Big Four Accountancy Firm Auditors. It will force them to use smaller “challenger” firms to conduct a proportion of their audits whilst still maintaining the main purpose of holding company directors to account in regards to a companies finances.

The reform aims to protect jobs, minimise and avoid company failures as well as lift the reputation and dependability of the UK as a place for investment.

Why has the Company Audit Reform come about?

Over the last few years, there have been concerns raised that providing both accountancy and auditing services from just one company can result in a conflict of interest.

Using just the big-name auditing businesses can put markets at risk during and following an audit.

The changes will support the growth of smaller auditing firms across the country, promoting new jobs and securing existing ones.

It will provide more transparency over a company’s accounts and the changes will help to deter firms from making largescale dividend and bonus payments when they are facing insolvency. Company directors will also be required to produce “resilience statements” as part of the reform making them more accountable.

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The UK is consistently placed as one of the leading destinations for foreign investment in Europe and around the world, however, in recent years, investor and public confidence in how businesses are governed has been undermined and this has shown in the collapse of several large UK businesses. The aim of the reform is to enhance the reputation and dependability of the UK as a place for investment.

Reforms of the audit industry have been on the horizon for a few years after a number of high-profile company’s collapsed including Carillion, Thomas Cook and BHS. All leading to a high number of job losses, and as a result, the British taxpayer picking up the bill.

A number of smaller reviews in the audit market (the Competition and Markets Authority’s (CMA), the Brydon review, and the Kingman review) have all raised concerns over the governance and control within the auditing sector.

Hayvenhursts Accountancy Services is a smaller Challenger Accountancy Business in Cardiff that will be able to conduct a meaningful portion of an audit on behalf of one of the Big Four Firms.

You can find out everything you need to know about Haybenhursts and their accountancy services and the audit reform here: hayvenhursts.co.uk/uncategorised/company-audits/

Contact us on 02920 777 756 and find out how we can help you.