The UK’s efforts to step up oversight of the market for auditing corporate financial statements are expected to stay on hold until after an upcoming government election, threatening to render current proposals out of date, according to industry observers.

The government has so far failed to pass necessary legislation for implementing reforms proposed in 2021, following the financial collapse of construction company Carillion Plc without warnings from its auditor, KPMG. Priorities for this session of Parliament, laid out earlier in November, excluded the reform measures.

Plans included setting up a new, more powerful audit regulator and ratcheting up company bosses’ …