ICAEW proposes four principles to future-proof reporting accountants
June 30, 2025
In a bid to future-proof the UK’s capital markets, ICAEW has outlined four principles to evolve the reporting accountant’s role, highlighting the balance between proportionate assurance and maintaining investor trust.
The Institute of Chartered Accountants in England and Wales (ICAEW) has set out four principles to guide the future of the reporting accountant’s role in capital market transactions, particularly as UK listing rules undergo reform.
In a newly published paper, the chartered body argues that the independent assurance provided by reporting accountants must evolve in line with market developments, with a focus on fostering economic growth and bolstering London’s appeal as a listing destination.
The paper arrives as regulators seek to streamline the UK’s listing regime and prospectus requirements to attract more high-growth companies.
Recent amendments to the UK Corporate Governance Code and updated guidance from the Financial Conduct Authority (FCA) have signalled a regulatory shift aimed at modernising market entry routes while safeguarding investor confidence.
“Independent assurance of company information is a cornerstone of trust in our capital markets,” said Iain Wright, ICAEW’s chief policy and communications officer.
“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,” Wright continued. “But as the capital markets landscape evolves, so must the role of our members.”
The four guiding principles aim to:
Promote a holistic understanding of the reporting accountant’s function.
Commit to proportionate assurance that reflects transaction-specific risks.
Ensure consistency in assurance processes pre- and post-IPO.
Enhance understanding of assurance and diligence activities among market participants.
While advocating for flexibility, the paper warns against weakening the level of scrutiny. Reducing independent checks could leave newly listed firms ill-prepared for public reporting requirements, heightening the risk of post-IPO restatements or profit warnings.
“Growth and economic stability are both built on foundations of investor confidence,” said Wright.
“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.”
[Accountancy Age]
