High-risk accounts plan watered down
Whitehall officials look set to water down recommendations that accounts identified as high risk by the Inland Revenue be passed to the Financial Reporting Review Panel.
Link: New role for proactive panel
Earlier this year, the government coordinating group on audit and accounting issues, set up to prevent an Enron-type scandal in the UK, recommended the government use legal gateways to enable information to be passed from the taxman to account-ancy regulators.
In its final report in January, the group said that there should be a framework to ‘allow information to be passed between the Revenue and the Financial Services Authority/FRRP/DTI, so that data held by the Revenue can be used to help identify high-risk accounts’ for investigation.
But recently released minutes from a meeting of the Revenue large business office forum in July said: ‘If the gateway was set up then information would only be passed to the FRRP in a very limited number of cases.’
The minutes also said that ‘no referrals will be made without discussion with the corporate and their auditors’ and that ‘no more than a handful’ of accounts would be referred each year.
But a Revenue spokesman described the possible watering down as ‘pure speculation’ and ‘misleading’, saying it was too early to draw conclusions.