Government chaos casts doubt over reformed audit rules

The resignation of John Glen in protest to Prime Minister Boris Johnson, has rocked the financial world. His departure from office comes days before he was due to unveil proposed reforms to reset a post-Brexit financial service industry.

John, who has held his post as economic secretary to the Treasury since 2018, stated he could no longer stay in post because of his “complete lack of confidence” in Boris Johnson as Prime Minister.

Glen said the planned bill would bring a new era of financial services to Britain including reform on insurance, capital markets, cryptocurrency, and rewriting the rulebook on the objective of financial regulators post Brexit. Yet following his resignation there is doubt surrounding the pace at which this reform will come to fruition.

This government shake up is also likely to affect the government’s plans to reform the way corporate governance and audits are carried out.

Chris Biggs, Founder of Theta Global Advisors discusses the new auditing rules: “After three years of consultations, the resignations of key government figures are worrying as this may slow the pace of the crucial audit reform Britain needs.

“There are potential issues around this shake up, but that is no reason to shy away from much needed reform. Possible increased costs and time delays for firms outside of the Big Four performing particularly complex and demanding audits are in some ways to be expected because of shared audits.

“However, these risks can be managed and mitigated with appropriate structures to facilitate a growth period as these smaller firms gain more experience and resources when working on such projects.

“There have been three independent reviews so far and major failings are still happening with the Big Four’s current monopoly. The legislative reform has certainly re-energised the push, but we need to now see more follow through if the issues are to be solved effectively and for the long-term.

“At Theta Global Advisors, we do not audit and hence, we are one of the few truly independent accounting advisory firms for non-audit services. Mid-sized firms such as ours that are disrupting the industry in a truly unprecedented manner are seeing great success having worked on major accounts this year.

“For London to continue as a top choice globally for professional services, it is essential to stay ahead of the curb moving forwards, be that through shared audits or caps on the Big Four’s current monopoly.”

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