ICAS urges Treasury to help restore confidence

The Scottish institute is urging the select committee to introduce guidance reminding boards of directors of their responsibilities, and those of non-executive directors.

In February the Treasury, together with the Department of Trade and Industry, announced a broad review of the industry amid the collapse of Enron, once the seventh largest listed company in the US, and the ensuing breakdown of its auditor Andersen.

Representatives from the ICAEW, ACCA and CIMA recently appeared before the committee to give evidence as part of the review.

In particular, it is looking at the provision of non-audit services to audit clients and the statutory rotation of auditors.

The institute said the review should take place under the auspices of the Accountancy Foundation, the UK’s new independent regulator.

Pressure is also being put on the Treasury committee to ensure that the International Accounting Standards Board retains its principles-based approach to accounting standards, and does not adopt the rule-based method favoured in the US.

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