A Blueprint for Audit: Overview & Findings

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 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 policies represented a once-in-a-generation effort to re-formulate what UK audit and corporate governance should be, and how they should deliver in the public interest.

Promised legislation to enact the proposed changes was delayed, watered down, and then ultimately cancelled in January 2026. This decision prompted much 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 plans for legislation is that UK audit and corporate governance have moved on in the long wait for the Bill. In this paper, we assess exactly what those changes have been, and the degree to which the independent reviews – and the Government’s own proposals – have been successful in instigating change. We also look at which key issues still need to be addressed.

Key Findings

• Just one-sixth of the Government’s 2022 reform package has so far come to fruition in some form – usually due to action by the Financial Reporting Council (FRC) or the audit sector. Another sixth is still pending thanks to a promised review of the future of corporate reporting and a commitment to shifting the Financial Reporting Council to a statutory footing. This means that just under three-quarters of the landmark 2022 reform package appears to be at a dead-end.
• Although much of its recommendations focus on the establishment of a yet-to-be-created regulator, the Kingman Review has perhaps been the most ‘successful’ of the independent reviews, with a third 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 a change in approach, including the ‘operational separation’ of the UK’s largest audit firms’ audit and non-audit practices – a move which has helped drive a prioritisation of audit quality and quality-first cultures.
• By contrast, just one-sixth of the Brydon Review has led to some sort of change – and just under three-quarters of its proposals have led nowhere. However, while only a small proportion of Brydon’s recommendations have led to progress, this progress still has 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 evenly between auditors and UK companies in terms of where action would have been required, or where consequences would have been felt. Just under a third of proposals related to auditors, and just over a third related to companies. The implementation of the proposals has been much more uneven, however. Just under three-quarters of the Government’s proposals have affected auditors in some way; just over two-fifths of the changes have affected companies.