Bosses Fear UK Is Vulnerable to Enron-Style Accounting Scandal
The vast majority of Britain's business leaders believe the UK is vulnerable to an Enron-style accounting scandal.
A total of 82 per cent voiced their concern in a new MORI survey commissioned by accountants RSM Robson Rhodes, contradicting the view held by many British commentators that an Enron 'could never happen here'.
The board level survey of more than 150 companies and public sector organisations found that while over a quarter (27 per cent) of executives consider that the official response to Enron will 'greatly improve corporate governance', a third disagree. A further 25 per cent remain undecided.
Bob Hale, managing partner of the Birmingham office of RSM Robson Rhodes, said: 'What this research clearly shows is that complacency is the enemy of good corporate governance. In order to prevent an Enron-style occurrence in the UK we need a complete cultural change in perceptions of corporate governance.
'Businesses must foster a culture of integrity from the board room down, which is a real challenge for larger corporates with more diffuse management structures. And of course, corporates need to have faith in the audit firms. Tighter regulation of audit firms, such as the introduction of international quality standards and independent inspection procedures, may go someway to reinforcing this.
'However, ultimately the board is responsible to shareholders and other stakeholders for the proper stewardship of the company, and the buck stops with them.'
His plea came as the Institute of Chartered Accountants in England & Wales, at their annual conference in London, heard calls for a new initiative to review current thinking on corporate reporting and develop a consensus on the way forward. …