PracticeAuditUK auditing review extended to WorldCom

UK auditing review extended to WorldCom

An urgent government review of UK accountancy, auditing and professional regulation post-Enron is being extended to WorldCom with an interim report to be published next month.

The extension of the inquiry was announced by No. 10 Downing Street the day after the extent of the WorldCom collapse became clear.

Financial secretary Ruth Kelly said that while the UK had different systems in place it would be ‘irresponsible if we did not take issues such as Enron and the collapse of WorldCom seriously.’

She added, in a BBC Radio 4 interview: ‘Following Enron we immediately set up a committee, jointly chaired by myself and Department of Trade minister Melanie Johnston, to bring together all the various regulators and accountancy and auditing bodies to look at how we can learn the lessons from Enron in the situation here in the UK.

‘What we are looking to do is to make sure we have the right framework in place to minimise the likelihood of the Enron type of affair happening here.’

Kelly made it clear: ‘We can’t be complacent. We have to take things seriously.’She said the committee is looking at the lessons to be learned in particular ‘for accountancy standards, for auditing practices and for regulation of the profession’.

The top-level review is in addition to action already taken in the UK over financial regulation and market stability – including setting up the Accountancy Foundation.

It follows clear signs that any sympathy towards the accountancy profession, though never strong, is fading fast, particularly among Labour backbenchers, where talk of ‘crooked accountants’ is becoming more common.

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