Accountants in de hoek in USA

[Cees Binkhorst]

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Zoiets zal de geachte voorzitter van de AFM ook wel willen denk ik?

Find this article at:
http://news.ft.com/s01/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1059478833524&p=1012571727088

US watchdogs in crackdown on accountants
By Gary Silverman and Adrian Michaels in New York
Published: August 8 2003 19:51 | Last Updated: August 8 2003 19:51

US banking regulators on Friday signalled a crackdown on accounting malpractices, threatening to bar entire accountancy firms from auditing
banks if the firms are found to have engaged in improper conduct.

The Federal Reserve and the other banking regulators said that they were taking the action because of their "increasing concern with the quality of
audits and internal controls for financial reporting at insured depository institutions".

The new rule was issued by all four leading federal bank regulators: the Federal Reserve, the Office of the Comptroller of the Currency, the
Federal Deposit Insurance Corporation and the Office of Thrift Supervision.

The regulators issued their rule governing bank audits in spite of the objections of some industry officials, who argued that the banking
regulators only had the authority to bar individual accountants, not entire firms.

But the regulators said their reading of the law suggested that they could bar whole firms from providing auditing services to banks that
possessed more than $500m in assets.

The rule would also let the regulators issue a notice immediately suspending accountants if there was any suspicion of wrongdoing. They said
banks could get adjustments to their filing deadlines in such cases.

The regulators said they were aware that "severe economic consequences may result from action barring an accounting firm". They promised that
they would be "sensitive to the consequences that barring a firm might have on innocent third parties not directly involved in the misconduct at
issue".

After the failure of Enron and other scandals involving fraudulent corporate reports, the accountancy profession is under the greatest regulatory
pressure in its history.

Last year's Sarbanes-Oxley Act - the most sweeping financial legislation to be enacted in the last 70 years - created the Public Company
Accounting Oversight Board to replace the profession's failed system of self-regulation.

The board's creation came in the wake of widespread discontent with audit failure, particularly the part that was played by Andersen at Enron.

The accountancy profession is now also heavily restricted in the non-audit services which it can offer to audit clients, for fear of conflicts of
interest.

The board - headed by William McDonough, former chairman of the Federal Reserve Bank of New York - has just started to register all
accounting firms that audit public companies.

It will also have to perform inspections of the firms, and will have powers to impose stiff sanctions if appropriate.

The Securities and Exchange Commission, the US's chief financial regulator, oversees the board's work. It has the power to bar auditors from
working at public companies and, in extreme cases, to close down whole firms.

At the present time - as a result of one case against Ernst & Young - it is trying to bar E&Y from taking on any new clients for six months.


Groet,

Cees Binkhorst - cees at binkhorst.xs4all.nl

Dogma wint het van de realiteit - Minister van Justitie Piet Hein Donner: 'Het is een seksistische stelling dat het iets uitmaakt dat er meer vrouwen in het kabinet zitten. Mannen en vrouwen zijn in
beginsel gelijk.'

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