The Accounting Standards Board’s urgent issues taskforce (UITF) failed to answer the government’s call last week for guidance on how the profession should handle the computer millennium problem.
The UITF met last Wednesday as the government sought to address rising concerns over the year 2000 issue, but the ASB said it would not publish or discuss the taskforce’s deliberations until later this month.
As reported last week, the Department of Trade and Industry looked to the profession’s technical bodies to encourage companies and their auditors to disclose their year 2000 preparations in company accounts. After conservative MP David Atkinson’s private bill was squeezed off the parliamentary timetable, trade minister Ian McCartney said accountants should play a more prominent role and cited the UITF’s draft guidance on the issue, which was considered at last week’s meeting.
Despite its Action 2000 millennium bug campaign and dedicated Cabinet committees, the government is coming under increasing pressure from both accountancy and IT experts to take firm action.
The Treasury this week poured cold water on a call from former conservative Treasury minister, Lord Cope of Berkeley, for tax breaks to encourage companies to upgrade their systems to cope with the millennium date change.
A Treasury spokesman said it would require a convincing argument to change the current tax treatment of maintenance and IT expenditure.
Maurice Fitzpatrick, head of economics of Chantrey Vellacott, criticised the government’s recent announcement that it had budgeted #370m to fix its central IT systems.
‘Our political masters are sleepwalking into a public sector disaster.
It’s by far the biggest issue facing the government,’ said Fitzpatrick.
‘This is a #10bn issue that needs to be resolved in the next 12 months and the amount it has budgeted is zero. And it’s got to be spent by April 1999 – while the two-year budget freeze is still in effect.’