UK firms to reform practices: companies are keen to avoid criticism from stakeholders.

Author:Hayward, Cathy
Position::Financial Reporting
 
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Almost half of all British businesses are planning to change their financial reporting methods in the light of the Enron debacle, according to a survey by enterprise software company Hyperion.

Respondents cited increased official scrutiny of accounting practices and a desire to avoid criticism and improve transparency as their main reasons for changing. "Whether or not government regulations around the world require faster or more stringent reporting, shareholders are requesting it and businesses are moving in that direction" said Jeff Rodek, CEO of Hyperion.

A growing number of companies have changed auditors or adopted new accounting practices since the start of the year. Unilever has put its external audit function out to tender after years with PricewaterhouseCoopers, although this had been planned before Enron went under. Several years ago the group introduced a rule that it would not use its auditor for consulting purposes.

"Although we're satisfied that there's no conflict of interest, you can never avoid that perception unless you stop doing it. You need to do your best to avoid those situations where it simply causes an unnecessary distraction," Rudy Markham, the company's finance...

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