Take the high ground

Audit reform in the UK continues to cause worry. Or—to clarify—the worry comes from the fact that it hasn’t happened yet despite endless talk, debate and investigation for the past six years.

This week, it was the turn of accountants north of the border to sound the alarm about declining prospects for serious changes to the way audits are conducted and regulated.

Bruce Cartwright, chief executive of ICAS, Scotland’s highly respected accountancy institute, told the Daily Business that, despite indications that the new Labour government now views the audit reform discussion as “ancient history” and a “barrier” to growth, “promoting accountability and safeguarding trust,” through a reformed audit sector remains “critical”.

“The arguments for this reform have already been made and won,” says Cartwright, “and are widely recognised as being needed across the different parties, so we mustn’t lose sight of this.”

The previous Tory government had promised a new regulator with strengthened powers and the introduction of “managed shared audit” to include so-called challenger firms in key audits.

However, very little has happened. Reform was included in the King’s Speech and the issue was debated in the Lords, with a government minister suggesting it was still on the government’s agenda. But that was back in October. Since then, radio silence.

Last week, the Financial Times reported that ministers have met with audit sector leaders to discuss “watering down”, or even axing, some of the reforms.

Has audit reform been strangled by the growth agenda? We can only wait and see.

Plan? What plan?

There is a lot of talk about how US companies are responding to the second Donald Trump presidency. EY says they will have three priorities: adapt oversight to help management deal with persistent uncertainty; help guide transformation across areas such as technology, security and innovation.

But the third priority experts give is this: “Boards will prioritise scenario planning on geopolitical, economic, labor and climate outcomes to build resilience and enable agility.”

Given the welter of executive orders emanating from the White House over the past 10 days, many of them threatening to transform the political and economic environment, companies better accelerate that scenario planning fast.

La vérité verte

The French government may have asked the EU to delay introduction of new non-financial reporting rules, but not everyone is behind them.

This week, a group of French NGOs—among them Sherpa, ActionAid France and Oxfam France —wrote their own letter to their president urging support for the two new pieces of law: the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive.

“We call on President of the Republic Emmanuel Macron and the Bayrou government to reconsider their position as soon as possible and to reiterate France’s support for the European duty of vigilance, for the other texts of the Green Deal which are vital for people, the climate and biodiversity and for respecting their implementation timelines.”

Board Agenda has a gnawing sense that there’s going to be a lot of disappointed campaigners at the end of this process.