PracticeAccounting FirmsThe corridors of power …

The corridors of power ...

There is not a shadow of doubt that Patricia Hewitt, the secretary of state for trade and industry, would like to make accountants more accountable in the wake of the Enron and Andersen scandals.

She has privately expressed this view even though UK accounting rules are already far ahead of those governing US accountants. But the Enron/ Andersen affair has trained the parliamentary spotlight on accountants.

Peter Wyman, the new president of the ICAEW, is at the forefront of a campaign – unwelcome to some – to tighten the rules governing accountancy.

And, as far as Hewitt is concerned, in this Wyman is pushing at an open door.

It was in February that Hewitt announced the government was to review auditing after the collapse of Enron.

What concerns her more is the need for whistleblowers to raise the alarm when things look like going wrong. This is a result of the failure of Andersen to sound the klaxon over the huge financial irregularities at Enron.

And what is troubling her as much as anything is the way that a conflict of interest is created where, it seems, increasingly, auditors hold accountancy or consultancy contracts at the very firms which they audit.

This is something which Hewitt is determined to address, either through primary legislation or through regulation.

However, the malpractices in the US which the Enron affair has thrown up have sent a number of MPs into an overdrive of reforming zeal, even though they are generally malpractices unlikely to occur on this side of the Atlantic.

But, as politicians know, it usually takes a financial disaster – or an equivalent calamity in any other sphere of life – before parliament lumbers into action.

It is a habit known at Westminster as shutting the gate to make sure that the second horse doesn’t bolt.

Related Articles

LLPs in Top 50+50: Will LLPs continue to be the preferred set-up?

Accounting Firms LLPs in Top 50+50: Will LLPs continue to be the preferred set-up?

12h Fergus Payne, Lewis Silkin
BDO’s global revenues pass $8bn

Accounting Firms BDO’s global revenues pass $8bn

6d Alia Shoaib, Reporter
Top 40 International Networks, Associations and Alliances: Finding growth amid uncertainty

Accounting Firms Top 40 International Networks, Associations and Alliances: Finding growth amid uncertainty

1w Philip Smith, Reporter
Top 40 International Networks, Associations and Alliances 2017: Big Four tussle for top spot

Accounting Firms Top 40 International Networks, Associations and Alliances 2017: Big Four tussle for top spot

1w Emma Smith, Managing Editor
BDO reports revenue growth of 5.7%

Accounting Firms BDO reports revenue growth of 5.7%

2w Alia Shoaib, Reporter
Taylorcocks announces merger with Surrey firm

Accounting Firms Taylorcocks announces merger with Surrey firm

2w Emma Smith, Managing Editor
Kingston Smith reports 7% gender pay gap

Accounting Firms Kingston Smith reports 7% gender pay gap

2w Emma Smith, Managing Editor
RSM announces two partner promotions

Accounting Firms RSM announces two partner promotions

3w Emma Smith, Managing Editor