Plans to hold company directors personally responsible for accountancy failure to be scrapped

Earlier this year, Scottish Financial News reported that the UK Government intended to reform corporate governance, as well as audit firms and their regulator.

The suggested changes to audit policy came after three independent reviews and increasing calls for an overhaul after a string of accountancy scandals at the likes of Patisserie Valerie and Carillion.

However, the UK Government is also expected to scale down its overhaul of the audit industry and the new rules which were intended to improve the quality of company accounts, amid growing concerns that the changes would cause excessive strain on thousands of companies.

The reforms were initially expected to apply to companies deemed to be “public interest entities”. However, the UK Government is now expected to adopt the narrowest definition of companies covered by the new rules, meaning a maximum number of 1,000 firms will be added to the list.

The Department for Business told The Daily Telegraph that no final decisions had been taken.

A spokesman said: “Our consultation on audit reform set out a wide range of proposals to restore public trust in the way big businesses are run and scrutinised.”