UK Publishes Corporate Governance Bill

by Robin Pilgrim, LawAndTax-News.com, London

08 December 2003

The UK government on Thursday published the Companies (Audit, Investigations and Community Enterprise) Bill, the first instalment of corporate governance legislation designed to prevent Enron-style abuses from taking place in the United Kingdom.

Under the terms of the Bill, directors will be required to state that they have not withheld information from their auditors, companies will be required to publish details of non-audit services provided to them by their auditors, and the Inland Revenue will be permitted to pass information about suspect taxpayer accounts to the Financial Reporting Review Panel (FRRP), which will also have its role strengthened.

Powers to investigate corporate wrongdoing taking place in the UK will also be substantially increased.

Commenting on the newly published legislation, Minister for the Department of Trade and Industry, Jacqui Smith announced that:

"This Bill completes a comprehensive package of measures aimed at restoring investor confidence in corporate governance, company accounting and auditing practices here in Britain. Its aim is to raise corporate performance across the board and beyond."

She continued:

"The Bill tightens the independent regulation of the audit profession and strengthens the enforcement of company accounting, both concerns highlighted by the Enron and Worldcom scandals. It gives auditors greater powers to get the information they need to do a proper job, and increases company investigators' powers to uncover misconduct."

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