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A series of significant UK corporate failures, including BHS (2016), Carillion (2018), Patisserie Valerie (2018) and Thomas Cook (2019), each of which collapsed unexpectedly and not long after receiving clean bills of health from their respective auditors, served as a catalyst for a process of independent review, consultation and recommendations on ‘Restoring Trust in Audit and Corporate Governance’.
A government consultation was published in March 2021, and the government response setting out which proposals it would be taking forward, and how, followed in May 2022. The current regulator, the Financial Reporting Council (FRC), endorsed these proposals, including the creation of a new body, the Audit, Reporting and Governance Authority (ARGA) to take over from the FRC, in a position paper released in July 2022.
The proposals for change set out throughout this process are very wide ranging.
Cadwalader's Joanna Valentine and Camillo Di Donato write more here.