Accountants must be brought to book, says new president

By Jason Niss
Thursday 26 December 2013 05:28
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Peter Wyman, who takes over this week as president of the Institute of Chartered Accountants of England and Wales, is to launch a big push to make accountants more accountable in the wake of the Enron scandal.

The PricewaterhouseCoopers partner will say not only that the audit committees of public companies should publish an annual report, but that accountants should be more transparent about their earnings for auditing and other services.

"The accounting practices themselves have to be more open in their governance procedures," Mr Wyman told The Independent on Sunday.

Mr Wyman assumes the presidency of the ICAEW at a critical time for the accounting profession. Not only has the collapse of Andersen, Enron's auditor, led to the big five firms shrinking to the big four, but also there is pressure for corporations not to give consultancy work to their auditors. This has led to deals to separate the businesses, the most recent being the management buyout of Deloitte Consulting last week.

Mr Wyman believed the collapse of Andersen could lead to problems, particularly in the area of due diligence reporting on mergers and acquisitions. He says that with only four large firms, conflicts of interest will rule most of them out and deal-makers will have to turn to the mid-range practices, such as BDO Stoy Hayward and Grant Thornton.

He also warned against potential litigation against auditors causing further consolidation. "We have to ward against four becoming three or even two because the auditors have been sued out of existence," Mr Wyman said. This would need reform of the limited liability for accounting partnerships, he added.

Mr Wyman has been accused of complacency because of his claim that UK accounting rules were so far ahead of their US counterparts that no dramatic reform was needed. But he also said Patricia Hewitt, the Trade and Industry Secretary, backed his views.

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