ICAS ICAS logo

Quicklinks

  1. About Us

    Find out about who we are and what we do here at ICAS.

  2. Find a CA

    Search our directory of individual CAs and Member organisations by name, location and professional criteria.

  3. CA Magazine

    View the latest issues of the dedicated magazine for ICAS Chartered Accountants.

  4. Contact Us

    Get in touch with ICAS by phone, email or post, with dedicated contacts for Members, Students and firms.

Login
  • Annual renewal
  • About us
  • Contact us
  • Find a CA
  1. About us
    1. Governance
  2. Members
    1. Become a member
    2. Newly qualified
    3. Manage my membership
    4. Benefits of membership
    5. Careers support
    6. Mentoring
    7. CA Wellbeing
    8. More for Members
    9. Area networks
    10. International communities
    11. Get involved
    12. Top Young CAs
    13. Career breaks
    14. ICAS podcast
    15. Newly admitted members 2022
    16. Newly admitted members 2023
  3. CA Students
    1. Student information
    2. Student resources
    3. Learning requirements
    4. Learning updates
    5. Learning blog
    6. Totum Pro | Student discount card
    7. CA Student wellbeing
  4. Become a CA
    1. How to become a CA
    2. Routes to becoming a CA
    3. CA Stories
    4. Find a training agreement
    5. Why become a CA
    6. Qualification information
    7. University exemptions
  5. Employers
    1. Become an Authorised Training Office
    2. Resources for Authorised Training Offices
    3. Professional entry
    4. Apprenticeships
  6. Find a CA
  7. ICAS events
    1. CA Summit
  8. CA magazine
  9. Insight
    1. Finance + Trust
    2. Finance + Technology
    3. Finance + EDI
    4. Finance + Mental Fitness
    5. Finance + Leadership
    6. Finance + Sustainability
  10. Professional resources
    1. Anti-money laundering
    2. Audit and assurance
    3. Brexit
    4. Business and governance
    5. Charities
    6. Coronavirus
    7. Corporate and financial reporting
    8. Cyber security
    9. Ethics
    10. Insolvency
    11. ICAS Research
    12. Pensions
    13. Practice
    14. Public sector
    15. Sustainability
    16. Tax
  11. CPD - professional development
    1. CPD courses and qualifications
    2. CPD news and updates
    3. CPD support and advice
  12. Regulation
    1. Complaints and sanctions
    2. Regulatory authorisations
    3. Guidance and help sheets
    4. Regulatory monitoring
  13. CA jobs
    1. CA jobs partner: Rutherford Cross
    2. Resources for your job search
    3. Advertise with CA jobs
    4. Hays | A Trusted ICAS CA Jobs Partner
    5. Azets | What's your ambition?
  14. Work at ICAS
    1. Business centres
    2. Meet our team
    3. Benefits
    4. Vacancies
    5. Imagine your career at ICAS
  15. Contact us
    1. Technical and regulation queries
    2. ICAS logo request

Placing audit reform at the top of the agenda

CA Agenda trust tile
  • LinkedIn (opens new window)
  • Twitter (opens new window)
Michelle Mullen By Michelle Mullen, ICAS Executive Director of Standards

31 August 2020

Audit reform must be placed at the top of the agenda if we are to restore public trust in the profession, writes ICAS Executive Director of Standards, Michelle Mullen.

To seek the truth

Those words have power, but they also bring responsibility.

In 1854 a group of Edinburgh-based accountants established a Society based on their common knowledge, skills and values. The roots of the profession were planted by a few for the benefit of society. They chose as their motto the words “Quaere Verum”. This motto still embodies what it means to be a CA today. Whilst the knowledge and skills of a CA might be those of business, this is still a profession that has made a promise to society.

Against that background, public trust in our profession is being challenged by the same issues that are challenging society, such as business behaviours, audit quality, equality, diversity and inclusion, sustainability, and economic growth. The COVID-19 pandemic and global economic uncertainty have simply added new challenges to this list.

Some say trust is a measurement of competency and ethics. I have heard others describe it as a measurement of competency, ethics and narrative. I am the first to admit that ICAS does not always comment publicly on certain issues, but that doesn’t mean that we don’t have a point of view. Sometimes ours is a quiet influence. However, I recognise our leadership on sector-wide issues is important to members, and we could do more to highlight the areas where ICAS is using its voice to help shape the future of business, the profession and, perhaps also, society.

Audit reform is moving back up the political agenda this week, as ICAS responds to the BEIS Parliamentary Committee’s call for evidence. The corporate failure narrative has never waned, or at least it feels that way every time I see another headline. Auditors have an obligation to call out materially misstated information, or any information which is materially inconsistent with the financial statements. Auditors are not responsible for corporate behaviours.

Everyone recognises that more needs to be done. Audit quality is improving but it is clear from the recent FRC reports that this quality needs to be more consistent. The firms set high standards for themselves and they have committed to making the necessary investments and improvements, but neither the profession nor the audit firms can do this alone. Increased competition should be encouraged and welcomed, but similarly it is not the panacea. There will, I hope, be a new role and purpose for audit in the near future, with increased reporting requirements, but we also need to see the implementation of a more robust directors’ enforcement regime, as proposed by the Kingman Review, possibly aligned with the early adoption of the proposed UK Internal Controls Statement and Resilience Statement.

Increased public trust in audit is going to need a wider holistic suite of reforms, and I would suggest this now needs to be delivered to a much more aggressive timetable.

The COVID-19 pandemic has placed the audit profession back in the spotlight; many believe it has increased the risk of fraud and for many businesses it raised questions of going concern with added complexity for preparers and auditors alike. We will now need to wait and see if the regulator reviews the 2020 audits with the benefit of hindsight.

We expect a further public consultation on the audit reform agenda before the end of the year, and over the coming weeks ICAS will be re-examining the key aspects of the reviews undertaken by Sir Donald Brydon, Sir John Kingman and the CMA. Clearly implementation of the full list of recommendations is a mammoth, and frankly impossible, task but there are certain key recommendations which could offer a coordinated way forward that encompasses corporate governance, corporate reporting and audit (notably, in that order).

Last week ICAS responded to the HMRC call for evidence on raising standards in the tax advice market. This has been a long-standing and thorny issue for our small and medium-sized practices, but at its heart this should be about consumer protection. In the UK there is currently no restriction on the provision of tax services – anyone can offer them. In contrast, ICAS practitioners need to be deemed competent to offer these services, maintain their knowledge and skills through annual CPD activities and of course hold professional indemnity insurance. Why should those standards not apply to all tax agents? It will come as no surprise that ICAS believes the long-term aim should be to require that all tax agents are both qualified and regulated. HMRC will have a number of priorities over the coming months, but the very publication of this call for evidence is a step in the right direction.  

Ultimately, both of these reforms will benefit society. They will improve the business ecosystem and help provide better foundations for the future.

Sir Donald Brydon

Interview: Sir Donald Brydon on the future of audit

By Christian Koch, CA magazine

27 February 2020

Audit quality is paramount

By Bruce Cartwright CA, Chief Executive, ICAS

6 February 2019

2023-03-MarksElectrical 2023-03-MarksElectrical
ICAS logo

Footer links

  • Contact us
  • Terms and conditions
  • Modern slavery statement
  • Privacy notice
  • CA magazine

Connect with ICAS

  • Facebook (opens new window) Facebook Icon
  • Twitter (opens new window) Twitter Icon
  • LinkedIn (opens new window) LinkedIn Icon
  • Instagram (opens new window) Instagram Icon

ICAS is a member of the following bodies

  • Consultative Committee of Accountancy Bodies (opens new window) Consultative Committee of Accountancy Bodies logo
  • Chartered Accountants Worldwide (opens new window) Chartered Accountants Worldwide logo
  • Global Accounting Alliance (opens new window) Global Accounting Alliance
  • International Federation of Accountants (opens new window) IFAC
  • Access Accountancy (opens new window) Access Acountancy

Charities

  • ICAS Foundation (opens new window) ICAS Foundation
  • SCABA (opens new window) scaba

Accreditations

  • ISO 9001 - RGB (opens new window)
© ICAS 2022

The mark and designation “CA” is a registered trade mark of The Institute of Chartered Accountants of Scotland (ICAS), and is available for use in the UK and EU only to members of ICAS. If you are not a member of ICAS, you should not use the “CA” mark and designation in the UK or EU in relation to accountancy, tax or insolvency services. The mark and designation “Chartered Accountant” is a registered trade mark of ICAS, the Institute of Chartered Accountants of England and Wales and Chartered Accountants Ireland. If you are not a member of one of these organisations, you should not use the “Chartered Accountant” mark and designation in the UK or EU in relation to these services. Further restrictions on the use of these marks also apply where you are a member.

ICAS logo

Our cookie policy

ICAS.com uses cookies which are essential for our website to work. We would also like to use analytical cookies to help us improve our website and your user experience. Any data collected is anonymised. Please have a look at the further information in our cookie policy and confirm if you are happy for us to use analytical cookies: