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Key recommendations not taken forward

Joint audit

The Government has identified significant barriers to implementing the remedies identified by the CMA. These barriers are the ability of challenger firms to grow and increase capability in order to undertake larger more complex audits and the joint and several liability risks associated with the CMA’s preferred solution of joint audit.

Public Interest Statement

At this stage, the Government is minded to keep under review the case for a public interest statement but not introduce a new statutory requirement within this current reform package. The Financial Reporting Council’s October 2020 discussion paper on ‘The Future of Corporate Reporting’ includes ideas for how a public interest report might be designed, while building and complementing existing reporting requirements. Comments received in response to the White Paper consultation and in response to the FRC discussion paper will help inform the Government’s and the FRC’s further consideration of the issue.

Whistleblowing

The Brydon Review recommended that workers should have legal protection for whistleblowing disclosures made to audit firms and audit partners, as well as directly to the regulator. It also recommended that Statutory Auditors for PIEs be added to the list of prescribed persons to whom workers can make a protected disclosure. The Government welcomes the intent of this recommendation but is not convinced that it would be appropriate to follow it.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.