Since 2019, the Financial Reporting Council (FRC) has been poised to transform into the Audit, Reporting and Governance Authority (Arga). This new body, envisioned as a stronger regulator, is an essential part of the UK’s broader attempts to reform its audit industry. However, the critical legislation to make this transition possible has been consistently deferred by ministers who have other electoral priorities.

There was optimism that these legislative changes would be part of the King’s Speech this coming November.

This hope is dwindling as insiders now believe that the audit reforms might not be part of the government’s upcoming plans. The Financial Times reports that, given this trajectory, it is improbable that any alterations will be put into action before the next general election.

A government spokesperson told the Financial Times: “The government remains committed to improving audit and corporate governance in the UK.

“Reform is already under way, including the Financial Reporting Council transforming the way it works, consulting on changes to the corporate governance code, and possessing more powers to ban inadequate auditors from reviewing large companies’ accounts.”

The FRC added that it “continues to appropriately plan for the creation [of the Audit, Reporting and Governance Authority] when legislative time allows”.