AIC says audit reforms should target larger more complex companies

"A one-size-fits-all approach will place disproportionate regulatory costs on smaller non-complex companies."

Regulatory documents

The Association of Investment Companies (AIC) has responded to the Government’s proposals on audit reform, “Restoring trust in audit and corporate governance.”

Ian Sayers, Chief Executive of the Association of Investment Companies (AIC), said: “The proposed audit reforms need to target larger more complex companies where there is greater regulatory risk. A one-size-fits-all approach will place disproportionate regulatory costs on smaller non-complex companies that outweigh the benefits for investors. We believe investment companies are non-complex and these companies could be governed by a regime similar to the current one.

“It’s a missed opportunity to look at audit processes without undertaking a wider review of company reporting. The AIC has long been concerned about the length and complexity of annual reports. A fundamental review of reports and accounts is necessary to ensure high quality, focused and reliable information is provided to investors.

“Finally, it’s vital that the Audit Reporting and Governance Authority (ARGA) has the correct statutory framework in place to become an effective regulator. The statutory objectives, scope and powers of ARGA need to be clear, defined and appropriate.”

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  1. The Association of Investment Companies (AIC) was founded in 1932 to represent the interests of the investment trust industry – the oldest form of collective investment. Today, the AIC represents a broad range of closed-ended investment companies, incorporating investment trusts and other closed-ended investment companies and VCTs. The AIC’s members believe that the industry is best served if it is united and speaks with one voice. The AIC’s mission statement is to help members add value for shareholders over the longer term. The AIC has 360 members and the industry has total assets of approximately £249 billion.
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