PracticeAuditBrown ponders OFR u-turn

Brown ponders OFR u-turn

Will Gordon Brown do anything that looks remotely like a u-turn on his decision to kill the operating and financial review?

That’s the question every accountant is asking as they look forward to next
week when consultation on the OFR closes.

To recap, it’s not really consultation on the OFR, but on its replacement. To
virtually universal dismay, the chancellor chose in November last year to
abruptly kill off the OFR, despite years of preparation. Though publicly the
Treasury said this was to cut red tape, the real reasons for the sudden change
of heart remain something of a mystery.

Such was the shock, that the government was forced into opening a fresh round
of consultation to find a replacement ­ to something that most people already
thought was very reasonable.

So what will happen? It’s difficult to say right now given the chancellor’s
unpredictability. ACCA wants a statutory option for companies to be able to use
the OFR as an alternative to the much criticised business review ­ another piece
of reporting regulation that has failed to find many backers.

‘That would be a compromise, which we believe would be acceptable to
government,’ said Jon Davies, ACCA’s head of business law.

One thing is for sure, and that is that the Treasury is under tremendous
pressure to do something to placate the legions of people astonished and
appalled at the loss of the OFR.

What the chancellor will not want to do is be seen to be backing down. Those
in the know are therefore preparing for a watered down version of the OFR, under
another name. It’s unlikely, though, that it will stop detractors from crying
foul and declaring that Gordon Brown has performed a u-turn on his u-turn.

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