PracticeAuditUK combined code under threat

UK combined code under threat

Business and investor representatives have written to the chancellor warning against the enforcement of European proposals on audit rules, which they claim will undermine the UK's corporate governance system.

The joint letter from the Confederation of British Industry and the Association of British Insurers lays out their concerns about the proposals, which will make audit committees mandatory and require at least one member to be independent, with accounting and auditing experience.

The two industry bodies say the changes will remove the flexibility companies in the UK currently enjoy, according to The Financial Times.

The UK combined code on corporate governance allows companies in Britain to adhere to the code or explain to shareholders why they have deviated from it.

But at a meeting in Brussels today, finance ministers are expected to approve the plans, which will be voted on by the European parliament next year.

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