Source: British Parliament News
14 July 2020
The Government’s response to the Business, Energy and Industrial Strategy (BEIS) Committee on inquiry into Thomas Cook been published today.
In the original findings from its Thomas Cook inquiry (in October 2019), the BEIS Committee expressed disappointment the Government had not pressed ahead with audit reforms and brought forward legislation to replace the Financial Reporting Council with the Audit, Reporting and Governance Authority (ARGA). On a timetable for action on ARGA, the Government’s response (published today) says, “…to create the new Audit, Reporting and Governance Authority will follow as soon as Parliamentary time allows.”
Darren Jones, Chair of the Business, Energy and Industrial Strategy Committee said:
“Recent audit scandals highlight the need for the Government to tackle this issue as a matter of urgency. At a time when businesses are facing tough trading conditions and when their balance sheets are under significant pressure, it’s important investors and other stakeholders can have confidence in audits.
“The Secretary of State’s evidence to the BEIS Committee last week failed to give a date for when primary legislation would come forward on audit reform. While the Government has a series of priorities at the moment, given the importance of audit and the fact the Department already has a raft of practical audit measures sitting on its desk gathering dust, we should expect the Business department to show far more urgency to help drive through the reforms needed on audit and on corporate governance.”
In October 2019, the BEIS Committee held a series of evidence sessions on the collapse of Thomas Cook which concluded with correspondence to Andrea Leadsom [letter and annex with recommendations], then Secretary of State for the Department for Business, Energy and Industrial Strategy, with a series of recommendations on corporate governance, executive pay and bonuses, and audit reform.
The Government response was received on 15 June 2020 and is published today [note, in the Government response, the BEIS Committee’s original recommendations are in bold type, the Government response in plain type].