Accountants' plans for new regulatory board under attack

Plans by leading accountancy bodies to set up an independent review board to supervise their regulatory activities were last night attacked as a holding tactic that "will not satisfy anybody".

Prem Sikka, accountancy professor at Essex University and a fervent critic of the accountancy profession, said the proposals published yesterday did not amount to independent regulation. The planned review board was "just an umbrella body" and the regulatory powers of such organisations as the Institute of Chartered Accountants would remain with them, he said, suggesting the move was an attempt to "appease" an incoming government.

Yesterday's detailed proposals by a working party chaired by Chris Swinson, of accountants BDO Stoy Hayward, followed the announcement in April of the intention to establish an organisation that would be independent of the accountancy profession.

The working party was drawn from all six bodies that form the Consultative Committee of Accountancy Bodies. But the Chartered Institute of Management Accountants, which last year was in merger talks with the Institute of Chartered Accountants, made clear it had reservations about the plans.

It particularly wants the Auditing Practices Board, the body that sets standards for auditors, to be given greater independence by being placed alongside the Accounting Standards Board under the Financial Reporting Council rather than within the ambit of the new review board. But it also shares some reservations expressed by senior members of the profession about the extent to which the plans would amount to clear independent regulation.

The review board's objectives would be to ensure that the systems of regulation and discipline within the profession serve the public interest by maintaining the standards of work by professional accountants and to criticise what has been done and make recommendations for improvement where necessary.