Accountants face new rule to cut risk

THE world’s Big Four accounting firms must appoint independent non-executives to help reduce the risk of an Andersen-style collapse, under the terms of a new UK governance code published today.

The Audit Firm Governance Code – which has been drawn up at the request of the Financial Reporting Council – is the first time the firms will be required to adopt a code similar to that governing the companies they audit in the UK, the Financial Times reported.

The most radical proposal is that auditors allow outsiders into their partnerships to provide companies and investors with a better insight into their decisions.

Accountants have broadly welcomed the move.