Smaller firms will carry the can

What was missed as the proposals were being talked up elsewhere, however, was an acknowledgement on the part of the government that those who will be left picking up the cost of much of the mooted reform will not be the large firms that were in the firing line. Instead it will be smaller firms – firms that might appear to have little to do with the Enrons and Worldcoms – and their clients that will have to pick up much of the regulatory bill.

It’s hard enough trying to persuade FTSE-100 companies that they need to pay more for an audit when the problems that are driving change have by and large occured on the other side of the Atlantic. Convincing SMEs will only be harder.

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