Audit reform timetabled for next year
While the US has already passed the Sarbanes-Oxley Act reforming audit into law, the Department of Trade & Industry's review of UK accounting practices will not report until early next year.
Link: Read more about the DTI audit report
This emerged as the DTI published the terms of reference of its audit review, set up in response to the corporate disasters of WorldCom and Enron.
A consultation document is to be published in a month’s time, but the actual review of auditing in the UK will only report in January 2003. This could mean that actual reforms are potentially a long way off.
In the US, the Sarbanes-Oxley Act has already been implemented by the SEC forcing all listed companies, including foreign companies quoted on American markets, to swear to the honesty of their annual accounts, every time they are published.
Trade secretary Patricia Hewitt said the purpose of the UK review was to examine the way the accounting and auditing profession is currently regulated.
In keeping with this the review will look at what regulatory functions are needed, who should carry them out, and how they are funded, including the scope for simplifying the current arrangements.
It will examine whether the existing balance between professional self regulation and independent regulation is the right one, and whether there should be a statutory basis for regulation;
And it will consider the case for taking a different approach to the regulation of the accountancy profession in general and to the regulation of auditors in particular.