‘It is important we do not allow US domestic problems to draw attention away from global solutions,’ she said while speaking to finance directors gathered on the ship Arcadia for the annual Finance Directors’ Forum.
US standard setters are currently involved in seeking solutions to the accounting crisis across the Atlantic, but Keegan warned they faced a particularly difficult set of circumstances.
Keegan said US accountants were currently wrestling with their ‘rule based’ accounting practices, but were forced to bear in mind the extremely litigious nature of the US which might prohibit a complete switch to a UK-style principles-based approach.
The feeling among FDs at the forum is that the difference between the two systems precludes an Enron or WorldCom-type event in the UK occuring, but there is a growing fear that the scandal will drive audit fees skyward.
Bill Durston, group FD at Marshalls of Cambridge and a former audit partner with Ernst & Young estimated that fees could rise by as much as 50%. ‘Plcs are going to come in for a shock,’ he said.
Mary Keegan was also careful to remind FDs that they must keep the switch to International Accounting Standards at the forefront of their minds. She said that ‘awareness’ was rising among company FDs but that planning should begin as soon as possible.