Just two weeks after Carillion collapsed in 2018, the head of the accounting watchdog – a body accused of being “useless” and “useless” – has called for an overhaul of the auditing market.

There’s a lot of blame to settle. The collapse of the construction company has left tens of thousands of employees facing layoffs, thrown into chaos hundreds of small suppliers and outsourced government projects, and thrown pensioners into the industry’s safety net.

The question is how auditor KPMG signed off on the company’s accounts four months before Carillion cut its contracts by £845m and issued a series of profit warnings. What needs to change after the damage caused by the collapse of other companies such as BHS?

The answer — four years later, three reviews and a massive consultation — is clearly not much for the government. Or at least without any urgency.

A year after launching the long-awaited audit and corporate governance reform process, it seems likely that the topic may be removed from next month’s Queen’s Speech.

This would be embarrassing for Commerce Minister Kwasi Kwarteng, who, to his credit, realised the importance of the subject and made it an early priority. This would be a short-sighted mistake.

The official explanation for the shelving of broad reforms is simple: priorities. The war in Ukraine has pushed energy security and dirty money (and hardly new issues) to the top of the agenda.

This is not entirely true. A possible package has been filled by those taking advantage of the government’s concerns about the unconservative proliferation of business burdens or rules. The UK’s Sarbanes-Oxley Act, which puts directors in charge of internal controls over financial reporting, despite strong support from investor groups and audit firms, and its success in the notoriously overregulated and overburdened US market, It appears to be one of the victims.

It would be unfortunate to miss out on truly radical reforms. But it seems inexcusable to fail to address fundamental questions about how to oversee the audit market, which are well known and uncontested.

John Kingman’s 2018 report made it clear that the audit watchdog’s Financial Reporting Committee was not fit for purpose – its problems were partly due to “limited hands” [had] Successive governments have dealt with it”. It lacks a meaningful statutory basis; its powers are “clearly inadequate”; and its funding through voluntary taxation is “grossly inappropriate”.

His prescription was to create a new agency with more powers and a broader remit that would no longer require negotiating with the regulated to regulate.

Under the leadership of CEO Jon Thompson, the FRC has undertaken a serious overhaul of its culture and approach, taking a stronger line with the industry. Its latest review of audit quality found that nearly 30 percent of audits fell below acceptable standards.

But acting on Kingman’s prominent proposals, which make up nearly half of the total, requires government legislation. Instead, the government may choose to put the infrastructure bank in statutory position and create a new football regulator, while putting the oversight of auditing and company reporting in an unacceptable state.

Possible changes include increased regulator mandated competition in a market where the Big Four still have an iron-fisted control over the audits of large public companies, as well as expanded oversight and expectations for higher standards of large private companies such as Liberty Steel, light bulbs or P&O. But they also include basic powers, such as the ability to commission reviews by so-called technicians in cases of concern, or to take enforcement action against directors.

This reform package has always been wrongly advertised as a way to stop businesses from failing. That is impossible. But improved oversight, standards, governance and disclosure—though unlikely to feature in political campaign flyers—should help predict, mitigate and manage the widespread harm caused by runaway and unexpected collapses.

It’s only a matter of time before the next big failure triggers another round of anxiety. Except this time, we already know what the answer should be. Now, if only someone could find the time to do it.

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