A decade of audit and corporate governance reform in the UK

The late 2010s saw the commission and publication of a series of independent reviews of the UK’s audit and corporate governance landscape: the Kingman Review of audit, accountancy and corporate regulation; the Competition & Markets Authority (CMA) review of audit market competition; and the Brydon Review of the purpose and scope of audit. These reviews were a response to significant corporate failures where poor corporate governance and audit lapses had been perceived to have played a key role. Having consulted on these reviews’ findings, the Government then published its own policy package for audit and corporate governance reform in 2022.

These three reviews and the Government’s subsequent policy proposals were intended to be a once-in-a-generation effort to re-formulate what UK audit and corporate governance should be.

However, promised legislation to enact the proposed changes was delayed, watered down and then ultimately cancelled in January 2026.

This decision prompted criticism from many stakeholder groups.

But the decision to not legislate does not mean that no progress has been made since the publication of the first independent review in 2018. Indeed, one of the Government’s reasons for dropping its legislation plans was that it felt UK audit and corporate governance had improved. In this paper, we assess what those changes are and the degree to which the independent reviews – and the Government’s proposals – have been successful in instigating or influencing developments. We also look at which key issues still need to be addressed.

Our findings are that:

• Just one-fifth (19%) of the Government’s 2022 package of reform proposals has so far come to fruition in some form – often due to action by the Financial Reporting Council (FRC) or the audit sector. Another 12% of proposals are still pending given the Government’s promised consultation on the modernisation of corporate reporting and its commitment to shifting the FRC to a statutory footing. This means that just over two-thirds (69%) of the landmark 2022 reform package appears to be at a dead-end.
• Although many of its recommendations focus on the establishment of a yet-to-be-created regulator, the Kingman Review stands out as being relatively successful among the independent reviews, with over a third (35%) of its proposals leading to some form of change in the audit and corporate governance landscape. Similarly, while far smaller in scope than the Kingman Review, the CMA Review has seen two of its five recommendations lead to change, including the ‘operational separation’ of the UK’s largest audit firms’ audit and non-audit practices – one of a number of changes in the sector that have helped drive a prioritisation of audit quality and quality-first cultures.
• By contrast, just one fifth (20%) of the Brydon Review has been implemented – and just under three-quarters (71%) of its proposals have led nowhere. However, while only a small proportion of Brydon’s recommendations have led to progress, these changes still have the potential to be significant. New requirements on internal controls in the UK’s Corporate Governance Code are one example of a potentially impactful Brydon-instigated reform.
• The Government’s 2022 proposals were split reasonably evenly between auditors and UK companies in terms of where action would have been required, or where consequences would have been felt. A little under a third (29%) of proposals related to auditors and audit firms and a little over a third (36%) related to companies and directors. The implementation of the proposals has been much more uneven, however. Two-thirds (67%) of the delivered reforms have affected auditors in some way; just over a fifth (22%) of the changes have affected companies and directors.”