Corporate Reporting and Audit Regulations

Further to our response to a BEIS consultation, the government has now published new draft regulations concerning corporate reporting, including measures that companies are taking to detect and prevent fraud. 

The draft regulations are expected to be debated in parliament this autumn. If approved by Parliament, the Regulations will come into force on 1st January 2025. 

The draft regulations implement the following four new reporting requirements for very large companies that were consulted on in the 2021 White Paper on ‘Restoring Trust in Audit and Corporate Governance’, and then confirmed (with some adaptations) in the 2022 Government Response to the White Paper consultation. 

1. A Resilience Statement, in which companies will set out how they are managing significant risk, and building or maintaining resilience, over the short, medium and long term. 
2. Disclosure of profits available for distribution and the company’s policy towards dividends and other distributions (e.g. share buybacks) including the risks relevant to sustaining the policy. 
3. A statement on actions being taken by directors to prevent or detect ‘material fraud’ (i.e. fraud on a scale likely to be of interest to shareholders). 
4. An Audit and Assurance Policy, in which companies set out their plans going forward for assuring the reliability of non-financial reporting (e.g. on risk, strategy, governance and climate transition planning), which is not assured by the statutory audit of the accounts. 

The Department for Business and Trade has also produced a factual overview of the draft regulations, which can be accessed here (this forms part of a new gov.uk page that combines this and all previous publications related to the audit and corporate governance reform programme). 

If you would like to comment on these new regulations, please do so below. 

Mark Bentley, Director, ShareSoc