Accountant warns of audit reforms

ONE of Britain's most senior accountants has warned against reforms aimed at preventing accounting scandals such as that at fallen US power giant Enron.

The admission by Andersen that it shredded documents in the face of investigations of its auditing has been held up as further proof that rules covering client relationships must be tightened to preserve the independence and integrity of auditors.

Peter Wyman, president-elect of the Institute of Chartered Accountants and a senior tax partner at PricewaterhouseCoopers, has challenged suggestions that audit firms may be compromised by the lure of fat fees or the opportunity to sell lucrative add-on consulting services.

In a letter to the Financial Times he wrote: 'Independent investigations have not shown the provision of consulting services to have been the cause, or even a contributory cause, to any audit failure.'

A ban on firms providing consulting services, he said, would 'do nothing to improve the effectiveness of the audit'. Instead, 'a narrowly focused auditing-only provision would significantly reduce the profession's attractiveness to top graduates'. That, in turn, would lead to lower quality audits.