Investor confidence in the independence of auditors has grown significantly year on year as research reveals trust in audit has grown across all major stakeholder groups.

The second annual Audit Trust Index from the Centre for Public Interest Audit (CPIA) shows that investor trust in the independence and objectivity of auditors has grown from 85% last year to 100% now.

Likewise, satisfaction with the audit process has risen from 77% to 100% among investors.

The index shows growth in trust for audit across all issues. Last year, audit committee chairs could offer only 59% satisfaction with the “value” of audits; this year the figure is at 89%.

Dean Beale, executive director of the CPIA, says in his foreword to the 2025 report: “These improvements reflect the impact of strengthened standards, clearer regulatory expectations and a growing emphasis on transparency and consistency in audit practices.

“This is the result of the combined efforts of audit firms, audit committees and the regulator to drive up standards and, in turn, confidence in the audit process.”

Demolition job

Trust in audit suffered a severe low after the collapse of construction giant Carillion in 2018 and the subsequent reviews of the company’s audit and audit more generally in the UK.

The report does, however, reveal some differences. When it comes to “satisfaction” with audit quality, 63% of audit committee chairs said they were very satisfied, compared with 78% of finance directors and 79% of investors.

Fewer finance directors were likely to say audit findings were useful, at 77%, compared with 87% of investors and 85% of audit committee chairs.

Audit committee chairs were least likely to be satisfied with audit fees (71%). Almost one fifth, 18%, said they were “dissatisfied”. They were also more likely to be dissatisfied with market choice and competition, with 16%, worrying about the current state of the audit sector.

There are also big improvements in confidence among stakeholders that audit could spot financial distress. Last year, 32% of audit committee chairs said they were “not very confident or not confident at all”. This year, the proportion is down to 4%.

The growth in confidence comes even as plans to reform audit regulation remain incomplete.

Following the Carillion debacle, a number of recommendations were made, including the creation of a brand new regulator—the Audit, Reporting and Governance Authority (ARGA)—to replace the Financial Reporting Council.

ARGA was supposed to have stronger powers and there were proposals to introduce “managed shared audit” as a way of expanding the stable of available auditors in the markets.

Stagnant legislation

However, neither the current government nor the previous one has managed to bring forward the necessary legislation. In September, a group of 66 MPs, co-ordinated by the Chartered Institute of Internal Auditors (CIIA), signed a letter urging the prime minister to push ahead with the new audit reform and governance bill that was promised in 2024’s King’s Speech.

Writing for Board Agenda, CIIA’s public affair lead, Gavin Hayes, argued: “We are deeply concerned that, without swift action to prioritise the audit reform and corporate governance bill in Parliament, the risk of further corporate collapses remains very real.”

Experts in the House of Lords have made their own call for government to push ahead with reform. Lord Prem Sikka told Board Agenda: “There is no transparency about the conduct of audits.

Corporate governance scandals fill the daily papers—the Post Office scandal, Grenfell, water companies, energy companies, banks, private equity, undeserved executive pay, financial opacity, profit sharing, etc, are just a few reminders showing that corporate elites have little regard for the spirit of the rules and welfare of stakeholders.”

However, this may not square with a Labour government that has come into power with a drive to reduce regulation. The chancellor, Rachel Reeves, notoriously said it was a “boot on the neck of businesses”.