1998 Review - Month-by-month chronology
Tax partners face government plans to abolish the cash basis for paying tax on profits and to factor work in progress into partnership accounts.
The move could cost firms hundreds of thousands of pounds FDs are less optimistic than last year, according to our annual Prosperity Index.
Only 68% expect a prosperous new year Disgraced chartered accountant and former minister Tim Smith, who resigned his seat over the cash-for-questions scandal, is fined by the English ICA for bringing the profession into disrepute.
February The merger between Ernst & Young and KPMG collapses in spectacular fashion as E&Y pulls out Arthur Andersen rejects claims it abused obligations to sister firm Andersen Consulting The Law Society considers changing its rules to allow solicitors to work more closely with accountants.
The Lord Chancellor backs plans for a limited liability partnership bill.
March The English ICA unveils radical plans to revamp its education syllabus, to prevent ‘inevitable extinction’ Merger candidates Price Waterhouse and Coopers & Lybrand get the green light from the regulatory authorities.
The firms plan to be fully merged by 1 July In his Budget, chancellor Gordon Brown defers withdrawing the cash basis for paying tax on partnership profits until 1999/2000. He also replaces the proposed three-year catch-up charge with a ten-year scheme.
April The British Taxpayers Association collapses blaming public apathy over self-assessment CIMA suddenly drops objections to Chris Swinson’s plans for a new professional watchdog as ministers hint a united accountancy profession stands a better chance of keeping self-regulation Pro-democracy campaigners Jeff Wooller and his ‘Ginger Group’ accuses English ICA council members of ‘censoring’ motions ahead of the agm Major finance and insurance companies, such as Sun Alliance, look to acquire small and medium-sized accountancy firms.
May The European Commission gives PW and Coopers the merger go-ahead, leaving six weeks to finalise senior appointments KPMG’s Mike Rake announces a seven-strong UK management team to spearhead global reorganisation Jersey’s parliament passes LLP laws and E&Y confirms it is still considering a move there The Joint Disciplinary Scheme announces a series of complaints against four Coopers’ partners for their audit of Robert Maxwell’s media empire.
June The English ICA faces criticism from members and councillors that the Belloff review – set up by new president Chris Swinson – will fail to tackle all complaints on disciplinary procedures. Swinson insists the review will ensure institute rules are ‘consistent with justice’ Merger fever grips the profession, as Group A firms Moores Rowland and Kidsons Impey announce consolidation plans.
July KPMG refuses to drop LLM, the controversial lobbying firm at the centre of the ‘cash for access’ scandal Four partners quit Group A firm Robson Rhodes following internal rows ACCA surprises the profession with a direct merger appeal to CIMA and CIPFA members. CIMA and CIPFA leaders condemn ACCA’s methods, but not the concept of rationalisation.
August The NHS reveals plans to revamp its finance function and considers cutting some of its 2,600 qualified accountants Dissident ACCA members prepare to censure president Michael Foulds for spending nearly #500,000 on merger proposals BDO Stoy Hayward is fined #150,000 plus #600,000 costs by the JDS over errors in its audit of Astra Holdings.
September The High Court rules Chinese walls are not adequate to protect client confidentiality after Prince Jefri issues a writ against KPMG UK companies are warned to resist cutting internal audit departments as the nation faces recession The DTI releases an LLP bill to limit the losses of innocent partners to their financial stake in their firms.
October The English ICA battles to stop the Financial Services Authority regulating members involved in investment business Arthur Andersen is dropped as Allied Carpets’ auditor following the #3m accounting irregularities scandal PwC loses its first major audit client since merging, as Diageo opts for KPMG The profession fears the Inland Revenue’s General Anti-Avoidance Rule will hit inward investment Big Five firms pledge to promote better accounting standards internationally after fierce criticism from the controller of the World Bank.
November Accountants welcome the chancellor’s SME-friendly Green Budget with hints corporation tax will be cut by 20% Rentokil Initial is accused of bullying when it tells suppliers to exempt themselves from the Late Payment Act The government publishes its consultation document on regulating the profession – largely in line with the Swinson proposals.
KPMG loses to Jefri on appeal.
December The DTI moves to calm the profession’s fears that LLPs will increase partners’ tax liabilities. It says adopting LLP status will not create tax charges for partners The DTI agrees to investigate whether Rentokil’s payment policy (60 days, rather than the 30 days stipulated in the Late Payment Act) breaks the law.