Investors back calls for all directors to be held to account
Speaking at last month’s Pan Accountancy Lunch, hosted by the London Society of Chartered Accountants, Investment Association director Liz Murrall called for the new accountancy regulator to have powers to hold all directors to account, not just accountants.
In a wide-ranging speech, delivered to an audience at the Mansion House that included the Lord Mayor Peter Eslin as well as ICAEW’s President, Deputy President and Vice President, Murrall said: “Undoubtedly most corporate failures are underpinned by poor corporate governance practices by directors. We therefore consider it essential that all directors can be held to account.
The present regime whereby only chartered accountants, be they in practice or in business, can be sanctioned by the regulator is clearly not right.
Murrall’s comments come at a time of great scrutiny for the accountancy profession as it awaits the outcome of a number of reviews and the formal creation of a new regulator. Murrall, who is also chair of the Financial Reporting Council’s Corporate Reporting Council, added that one of the most important reports investors receive is the annual report and accounts.
She said: “The fact that the accounts are subject to an audit is vital to investors’ confidence in those companies in that markets value the information and investors believe what they are told about investee companies. However, trust in the audit product has been undermined. While many auditors do good work and failures are few and far between the failures that do occur tend to be high profile and can impact many stakeholders not just shareholders.
The annual Pan Accountancy Lunch, now in its 13th year, is organised by the ICAEW London and South East Region and the London Society of Chartered Accountants, in conjunction with Chartered Accountants Australia and New Zealand, Institute of Financial Accountants, Chartered Institute of Management Accountants, the London Society of Chartered Accountants Ireland and the South African Institute of Chartered Accountants.
See also LSCA President Nathan Steinberg’s review of the event
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