headline: Audit reforms aim to prevent accounting scandals
text: A review into how company books are inspected has been announced in a bid to prevent future accounting scandals and business collapses.
  Ministers have been under pressure to overhaul auditing rules after failures like Carillion, BHS and Thomas Cook.
  government has created a new watchdog, the Audit, Reporting and Governance Authority (ARGA).
  But critics called the plan "watered down" and said auditors should be doing their jobs properly in the first place.
  government said the reforms "will help prevent sudden large-scale collapses like Carillion and BHS, which hurt countless small businesses and led to job losses."
  f Carillion and BHS cost in excess of 20,000 jobs and saw their auditors fined more than £25m in total.
  mpanies failed despite their accounts being signed off by one of the so-called "Big Four" globally recognised auditors - EY, KMPG, PWC and Deloitte. 
  government promised change and after several independent investigations, it has finally announced a revamp.
  w ARGA will replace the Financial Reporting Council. It will now cover unlisted companies with more than 750 employees and a greater than £750 million annual turnover.
  reak up the dominance of the Big Four auditors companies listed on the FTSE 100 and FTSE 250 will be forced to assign at least part of their audits to smaller firms.
  ARGA will also have new powers to be able to investigate and fine directors of large companies if they breach their duties around corporate reporting and audit.
  Meanwhile, rules for small businesses will be relaxed as the government said they could be "forcing too many of Britain's smallest businesses to spend time and money preparing accounts to a level of detail only needed for larger companies, distracting them from focussing on growth and creating jobs. "
  Accounting is not the sexiest subject in the world. But a sense of trust in the financial information presented to regulators, investors and customers is important particularly after it has been shattered by big companies suddenly going bust.
  government will establish a new watchdog, a requirement that larger companies have to employ an auditor outside of the Big Four and bringing large privately owned firms and some local authorities onto the regulators radar.
  However, in a post-Brexit world the government is keen not to be seen to be imposing new burdens on business and has watered down its initial proposals thereby excluding hundreds of large private companies and smaller businesses from the additional requirements. 
  When plans for an audit reform were put in a government white paper last year the threshold had been all private companies with more than 500 employees and a turnover of more than £500m.
  roposal would have almost doubled the number of companies deemed "public interest entities" that are subject to stricter reporting requirements to about 4,000.
  m Bush, head of governance and financial analysis at Pensions and Investment Research Consultants (Pirc) said: "The key message is that reform needs to be tasking auditors with the product they are supposed to be delivering already, not lobbying for watered down products that are useless."
  Minister for corporate responsibility Lord Callanan said: "Collapses like Carillion have made it clear that audit needs to improve, and these reforms will ensure the UK sets a global standard.
  "By restoring confidence in audit and corporate reporting we will strengthen the foundations of UK plc, so it can drive growth and job creation across the country."