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BIE CALLS FOR AUDITORS TO LEAVE CONFLICTING ROLES
9 May 2002
In the wake of the Enron saga BIE, the UK’s leading specialist provider of senior level interim executives, has called for auditors to adhere to US Securities and Exchange Commission (SEC) regulations.
“There is a clear conflict of interest when auditing firms supply an interim finance director, especially when over half (52%) of all interim appointments hold this position,” says Martin Wood, Managing Director of BIE.
The SEC has taken a firm line on this, stating: "Accounting firms should not be providing interim management services for their audit clients”.
The SEC goes on to say, "Under the Commission's regulations, an auditor's independence is impaired with respect to a company if it assumes a management function for that company." Yet, many auditors include senior interim executives in the range of services they aim to sell their clients. That said, there have been recent developments to the situation, according to Wood:
“Ernst and Young’s recent selling of their interim business is clear evidence that some auditors recognise the conflict.
“Interim executive management is not management consultancy nor is it executive search and selection. Furthermore, we are not headhunters but headrenters of suitably over qualified executives at or near board level who are placed into organisations to manage a period of transition, change, uncertainty or crisis. Unfortunately without adherence to SEC regulations and rigorous application of professional standards, the reputation of the industry is threatened.”
To discuss your interim management requirements with BIE call +44(0)20 7222 1010