ICAEW’s response states that what investors want is to see the quality of directors’ actions. Directors should focus on the processes, controls and behaviours that can cultivate or conceal fraud and take action to mitigate them.

In a bid to open up the market to more audit firms, the government is proposing the use of managed shared audits, but the Institute of Directors warns that this should not be rushed into without careful analysis. It stresses that the government should ‘take time to assess the viability of managed shared audits before widely implementing them’.

It is calling on the proposed new regulator, the Audit, Regulatory and Governance Authority (ARGA), to oversee a period of evaluation in which the capacity and willingness of challenger and Big Four audit firms to work together while managed shared audit is assessed and clarified, with any issues ironed out before extending this to the rest of the FTSE 350.