Just a week away from the King’s Speech, a group of MPs and Lords is calling on the government to include a long-awaited audit reform bill in its legislative agenda.

The call comes after stories emerged earlier this month that government would leave the bill until after the next general election. Labour has already said it would push ahead with the new laws were it to win when the country goes to the polls.

There are anxieties in the accountancy and audit sector that changes which have been under discussion since the collapse of construction giant Carillion in 2018 have been allowed to endlessly drift.

In a letter coordinated by the Institute for Internal Auditors (IIA), the MPs and Lords—among them Baroness Helena Kennedy and Sir Peter Bottomley, Father of the House of Commons—underline their support for an audit bill in the King’s Speech that would create a new audit watchdog with brand new powers. It adds that five years on from Carillion’s demise, there is “concern” about the pace of reform.

The group wants the new regulator—the Audit, Reporting and Governance Authority (ARGA), a replacement for the Financial Reporting Council—put in place and given statutory powers.

“No government can prevent all companies from collapsing,” the letter says, “but it should put in place a robust audit and corporate governance framework to support boards to manage their risks effectively and promote the interests of investors. This action will help deliver greater economic resilience and serve the wider public interest.”

A bill would not only create ARGA but also give it powers. Among those expected is the authority to impose a new set of minimum standards on audit committee members. Other powers may include the ability to sanction audit committee members, a recommendation made in an earlier white paper.

‘Managed shared audit’

Also expected in the bill are measures to ensure the use of “managed shared audit” at FTSE 350 companies, which would involve a lead audit firm, likely one of the big four, working alongside with a so-called smaller “challenger firm”.

Anne Kiem, chief executive of IIA, says the letter reflects “strong” cross-party support for audit reform. “While we wait there have been further corporate failures linked to audit and governance weakness including Patisserie Valerie, Thomas Cook and most recently Wilko.

“It is vital this Bill is voted on in the next parliamentary session and that the government don’t kick the can down the road until after the election.”

Audit has proved controversial in the past two weeks not for delays but also for cancellation of key segments that the government had already pushed ahead with in July.

At the beginning of October, business minister Kevin Hollinrake announced planned regulations to introduce new reporting requirements on audit and assurance policies, resilience, fraud measures and distributable profits.

At the time, Hollinrake said the U-turn would usher in a “more targeted, simpler and effective” reporting framework for business and investors.

London Stock Exchange chief executive Julia Hoggett—whose comments accompanied Hollinrake’s on a government press release—said: “Releasing listed companies from the additional reporting burdens that were proposed is another step toward the level playing field UK companies need to compete and drive the growth economy to the benefit of all stakeholders.”

Mike Suffield, director of policy and insights at ACCA, and a former executive director of audit and actuarial regulation at the Financial Reporting Council, the UK’s current governance watchdog, says the policy change is a “backward step” and could “diminish” the reputation of corporate reporting in the UK.

Recent government decisions have thrown doubt over central elements of the audit reform agenda, changes that have been deliberated, in some cases, for years. But a pushback is under way.