One-fifth of 2022’s landmark audit and corporate governance reform proposals led to change, says CPIA

• 19% of 2022’s landmark reform package introduced before the Government dropped plans for a comprehensive audit and corporate governance Bill in January 2026
• 69% of proposals appear to be at a dead-end, with 12% still pending
• CPIA says the failure to follow-through on planned reforms has left key gaps in director accountability, and consistency and clarity in the regulatory framework

LONDON, 22 April 2026 – One-fifth (19%) of the UK’s landmark 2022 audit and corporate governance reform proposals have led to change, according to new analysis by the CPIA (Centre for Public Interest Audit), despite the Government shelving plans for comprehensive legislation earlier this year.

Based on a series of independent reviews published in 2018 and 2019, and backed by both Conservative and Labour governments, the 2022 reform proposals were intended to be a once-in-a-generation re-formulation of UK audit and corporate governance. Although reform was promised in the 2024 King’s Speech, the Government announced it was shelving plans for a Bill in January.

In the absence of legislation, key 2022 proposals – including the ‘operational separation’ of the largest audit firms, tougher regulation, and additional director reporting on their companies’ internal controls – have been introduced through the work of the Financial Reporting Council (FRC) and audit firms. Remaining commitments to consult on modernising corporate reporting and shifting the FRC to a statutory footing mean another 12% of 2022’s proposals could still be introduced. CPIA’s findings are published in a new report, ‘A Decade of Audit & Corporate Governance Reform in the UK’.

Dean Beale, CPIA’s Executive Director, says:

“The decision in January to drop plans for audit and corporate governance legislation was disappointing. But in announcing this decision, the Government was right to highlight important changes in the sector since the proposals were first put forward.

“Elements of the 2022 proposals that could be achieved without legislation have played a key part in that change. The proposals – and the preceding Kingman Review – galvanised a change in approach to regulation by the FRC, for example. There are now new requirements in the Corporate Governance Code on internal controls reporting. And the CMA-inspired operational separation of large audit firms’ audit and non-audit practices has been one of a number of changes that have helped shift audit firm culture. Alongside this, many audit firms have invested heavily in audit quality, with improvements highlighted by the FRC’s audit quality reviews and our own Audit Trust Index.”

Key gaps remain on director accountability and the regulatory framework

Although the CPIA’s analysis shows clear progress on parts of the 2022 reform proposals, the absence of legislation means over two-thirds (69%) of this package now appears to be at a dead-end. The CPIA says that this has left gaps in UK director accountability and a lack of consistency and clarity in the regulatory framework.

Dean Beale says:

“There is an uneven feel to the changes that have taken place. While the original proposals were balanced between those which affected auditors and those which affected companies, the enacted reforms have focused on auditors. Director accountability has not evolved at the same pace. Ultimately, corporate failures are typically rooted in shortcomings in companies’ own governance rather than auditors’ failures to spot these problems. Action on director accountability is still needed.”

Just under third (29%) of the 2022 proposals would have led to changes for auditors and just over a third (36%) would have affected companies – of the changes introduced, two-thirds (67%) have affected auditors, while just one-fifth (22%) have affected companies.

Dean Beale adds:

“In the absence of legislative change, developments have been driven by the FRC and the audit firms. The Corporate Governance Code has been an important means for delivering change, but, broadly, this Code only covers various categories of UK listed companies and operates on a ‘comply or explain’ basis. Statutory change to bring consistency to the wider framework has been missing.

“For example, a central element of the 2022 reform proposals was re-defining the Public Interest Entities (PIEs) that should be subject to additional audit, governance and reporting requirements, but there’s now no clear route forward for this work. The lack of a robust, updated PIE definition remains a prominent gap in the UK corporate governance framework.

“The absence of a Bill will make it harder for the Government to put in place a coordinated approach to further audit and corporate governance reform. Ad hoc developments have moved things forward, but a clear overall plan would ensure reforms add up to more than the sum of their parts.”