Earlier this year we reported on the government's plans for audit and corporate governance reform, which could have resulted in directors being liable for the accuracy of their company's financial statements. However, the press has reported this week that such plans are likely to be scaled back following concern by businesses of the potential costs involved in adhering to the new regime. Although a statement about the effectiveness of a company's internal controls will still be required to be given by directors, the proposed legislation which would require director sign-off of internal controls for financial reporting may be discarded, at least for most companies. 

The BEIS have not confirmed the press reports either way but given the recent trend by the government to encourage business in the UK post-Brexit and post-pandemic, it will not be particularly surprising if the government takes on-board the concerns of the business community and curtails the extent of the reforms to some degree. 

This opens the debate as to whether directors should have such responsibility and potential liability in respect of their company's financial reporting and if they should, is now the time to be putting in place such reforms? What do you think?