07 February 2003
CIPFA this week described the merger of the UK's Financial Reporting Council and the Accountancy Foundation as 'logical and practical' in the wake of the US scandals that have rocked the profession in recent years.
Vernon Soare, policy and technical director at the institute, said the new regulator would have an immediate impact if it laid to rest fears about UK accounting.
'It's a logical exercise and brings together two organisations with similar but different emphases under one roof. It's particularly important given that the Financial Services Authority has been given a [financial reporting] scrutiny role that is not entirely clear yet.'
Previously, the Financial Reporting Council was responsible for oversight of the way companies reported financial information, while the Accountancy Foundation looked at the profession as a whole.
Most of the government's recommendations focus on the private sector, but Soare is under no illusions that some of the reforms will filter through to public bodies.
He suggests public organisations with corporate-style boards, such as health trusts and non-departmental public bodies, could be affected by new guidance on the relationship between executives and non-executives.
The Department of Trade and Industry wants to enforce a clearer separation of the roles of each for accountability purposes. 'That represents an opportunity for public bodies to review their activities,' Soare said. 'There is nothing in particular wrong with the current setup, but the public sector is not averse to learning the lessons of failures elsewhere.'
PFfeb2003
