PracticeAccounting FirmsWatchdog to ensure firms act in public interest

Watchdog to ensure firms act in public interest

The profession's new watchdog, the Accountancy Foundation, is to unveil plans to ensure accountants operate in the public interest, including a examination of the Enron collapse from the 'anglo experience'.

The move comes as the profession struggles to restore faith in its services in the wake of the Enron bankruptcy and the role of company auditor Andersen.

Colin Reeves, head of the Foundation’s Review Board, said: ‘The board has taken the view that there will be greater emphasis on issues of auditor independence over the next 12 months.’

Auditor independence had not initially been included as a priority for this year until the collapse of Enron and ensuing events involving Andersen.

The Foundation’s priorities are contained in a consultation paper called Protecting the Public Interest to be published at the end of next week.

Analysis will focus in particular on public concern over ‘incomprehensible and irrelevant accounts, costly and low-value-for-money audits, tick-box auditing, ‘low balling’ and the question of whether auditors can be truly independent when they are appointed by the very people who pay their fees’.

With Enron raising public concern, the Foundation has already sent out questionnaires to all six accountancy bodies in an attempt to define ‘public interest’. Responses from each of the bodies are included in the document.

Other priorities for this year include a follow-up study of the recent report on competition by the Office of Fair Trading, as well as plans to harmonise practices in areas, such as complaints and disciplinaries, across all the six UK and Irish institutes.

As part of a broader review, the Review Board has commissioned MORI to analyse views of leading businessmen and financial journalists regarding accountancy and other professions over the 1990s. The analysis will be published.

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