The London Stock Exchange has responded to DTI's consultation on new clauses on Company Law Reform. We welcome deregulatory changes, to bring company law up-to-date with current circumstances and technology. However, we are also mindful of the risk of increasing the regulatory burden on companies and would urge the Government not to do so unless there are clear benefits.
Our main concern is that the proposals on auditor offences may have unintended consequences; in particular, the additional information required from companies and work undertaken by auditors will significantly increase burdens and audit costs. We are concerned that proposals on auditors do not lead to a Sarbanes-Oxley style regime, resulting in more detailed rules (as opposed to a principle-based regime) with associated box-ticking mentality for auditors and increased burdens on companies.