Editorial comment.

Author:Prickett, Ruth
Position:Brief Article

The accountancy profession has taken some knocks over the past few months. As world economies teetered on the edge of recession, financial scandals at Enron and WorldCom sent share prices plummeting--and they dragged the reputation of accountants into the mud with them. It is too late now for business accountants to point the finger at auditors, analysts, lazy or inadequate directors and unwary investors. Instead, financial managers, advisers and regulators must unite to restore public confidence in shares. Business accountants can take a leading role in this, both inside and outside their organisations. Internally, the profession must work to ensure that company accounts are not only transparent, but seen to be transparent in the outside world (page 18). This may involve reporting on non-financial issues, explaining share value changes in more detail or using technology to reach investors more effectively.

Such moves are being backed up at government level by CIMA, which is playing an active role in the debate about regulation. Charles Tilley, chief executive of CIMA, recently responded to the Treasury select committee's report on accounting reform with a warning that statutory improvements to auditor independence would fail unless non-executive directors played a more challenging role (see page 5).

According to a new report by CIMA, which has been sent to the top 1,000 FDs in the UK, City culture and the behaviour that drives business reporting will need to change fundamentally if faith in capital markets is to be restored. The report, "Business transparency in a post-Enron world"...

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