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[greenspirit]

phyllos, here is another article discussing the issue in a little more detail.

KPMG chief calls for convergence and openness
http://www.accaglobal.com/news/general/2289847?view=Centenary
Mike Rake, chairman of KPMG International

Major markets need to agree principles of regulation and governance, rather than competing with, and superseding, each other, Mike Rake, chairman of KPMG International, told an ACCA (the Association of Chartered Certified Accountants) centenary event today.

Mr Rake, speaking at the ACCA's UK centenary seminar in London, said that with the spotlight on accountants and business as never before, they needed to act responsibly and hit back against charges of greed and self-interest to win back trust if capitalism was to survive. Improved dialogue between the profession, governments and investors was needed.

He added that the accountancy profession would not be forgiven if it did not work fully for IFRS convergence with US GAAP. "There is no good reason why there cannot be a global set of accounting protocols', he said.

The Right Honourable Chris Patten gave the after dinner address, he is pictured here with ACCA’s Deputy President, Christopher Forster

But Mr Rake said that business and the profession were suffering because of conflicting regulatory frameworks in which different regimes were trying to "out Sarbanes-Oxley each other. If the EU reciprocates by making US companies register with each European state in multiple languages it will not help business efficiency' he said.

The over-complexity of regulation post-Sarbanes-Oxley, while understandable, had now led to audit reports becoming over-complicated and of less use to investors, he said. "Audit Reports and financial statements have become close to incomprehensible to anyone except the experts and need to be simplified in terms of presenting company results", Mr Rake said.

Vera di Palma, a past president of ACCA, and the first female president of a professional body

Auditors should consider giving more information when they resign from an audit, and be more open about their risk management and client acceptance procedures, he said. And improved dialogue between accounting firms and governments was needed in terms of tax planning, so that sensible boundaries could be established to balance the need of companies to compete and exchequers to protect state revenues.

The award-winning Lloyd's building in the City of London

The KPMG Chairman said the move to quarterly reporting had put additional pressure on companies to constantly report increased profits. He said analysts needed to be more understanding of longer-term performance not just short-term figures, and said the Enron and Parmalat scandals had shown that investors and banks had just an important role as accountants in improving confidence in financial reporting.

Reflecting the theme of ACCA's Centenary year, responsibility, Mr Rake called for courage among CEOs to set the right ethical stance for their companies, which would permeate through. The success stories of business in the 21st century he said would be those that gave real meaning to corporate social responsibility, for which there was a strong business, as well as moral, case. Accounting scandals had occurred because of fundamental failures in corporate culture, as well as in internal controls he said.