Higher auditing scandal risk in Britain

BRITAIN is more at risk of an Enron-style scandal involving document shredding or false accounting by auditors than the US, a leading critic of the accountancy profession claims.

In a forthcoming book Prem Sikka, Professor of Accounting at Essex University, claims that in pursuit of profits leading accounting firms 'operate cartels, launder money, devise tax avoidance/evasion schemes, bribe officials and obstruct enquiries into their affairs'.

The book, Dirty Business: the Unchecked Power of Major Accountancy Firms, says accountants are such a law unto themselves in Britain that they should be stripped of their monopoly of external audit of companies and their work handed to the Inland Revenue, Customs & Excise, the Audit Commission or Financial Services Agency.

Alternatively, says Sikka, the ineffectual system of overlapping and often self-regulatory accountancy regulators should be swept away and replaced with a single independent Companies Commission with a brief to consider the interests of shareholders, employees and depositors.

p>'The Companies Commission should take responsibility for selecting and appointing auditors for all quoted companies,' Sikka said on Friday.