ICAEW four principles for evolution of reporting accountant role
June 27, 2025
The chartered accountancy body’s new paper addresses the need for reporting accountant’s independent assurance work to adapt to support economic growth and enhance the competitiveness of UK capital markets.
The Institute of Chartered Accountants in England and Wales (ICAEW) has proposed four guiding principles for the future development of the reporting accountant’s role.
The chartered accountancy body released a new paper focusing on the evolving role of reporting accountants in initial public offerings (IPOs) and capital market transactions in the UK.
It addresses the need for reporting accountant’s independent assurance work to adapt to support economic growth and enhance the competitiveness of UK capital markets.
The paper arrives amidst a shifting regulatory environment, which includes amendments to UK listing rules and prospectus requirements, as well as recent updates to the UK Corporate Governance Code and Financial Conduct Authority (FCA) guidance.
These modifications aim to facilitate a smoother path for a broader range of high-growth potential companies to enter the public market, aligning with the government’s ambition to make London a more “attractive” listing destination.
ICAEW chief policy and communications officer Iain Wright said: “Independent assurance of company information is a cornerstone of trust in our capital markets. Reporting accountants play a fundamental role in maintaining investor confidence during IPOs and ensuring companies can meet their public obligations.”
“Now, more than ever, investors need reliable information to make informed decisions but as the capital markets landscape evolves so must the role of our members. We hope this paper will spark constructive discussions with our stakeholders so we can agree a proportionate approach.”
“Growth and economic stability are both built on foundations of investor confidence and changes must not erode this. Robust independent assurance and transparent reporting will remain a critical underpinning of this confidence and of the credibility of the UK markets overall.”
The four guiding principles proposed for the future development of the reporting accountant’s role are designed to ensure a holistic view of reporting accountants’ work, establish a commitment to proportionate assurance processes, enhance consistency in pre- and post-IPO requirements, and improve the understanding of assurance and diligence during IPOs.
The institute emphasises the importance of balancing risk appetite with due diligence, assurance, and other safeguards, advocating for a more adaptable and proportionate approach.
However, the paper also cautions against diminishing the level of independent scrutiny, which could result in companies not being adequately prepared for the stringent reporting obligations of public entities.
This unpreparedness could potentially lead to an increased likelihood of financial restatements and profit warnings post-IPO.
Earlier in June 2025, ICAEW highlighted five significant alterations for taxpayers completing their Income Tax Self-Assessment (ITSA) for the tax year 2024/25.
[The Accountant Online]
