Tighter controls on fiscal reporting

Controls on the financial reporting practices of public companies are set to be tightened in the near future on foot of recommendations from the US Securites and Exchange Commission's Blue Ribbon Committee. Mr Ronan Nolan, national audit and assurance partner with accountants Deloitte and Touche, said yesterday that "while these developments do not have an immediate impact on financial reporting, they are likely to be adopted by regulatory authorities throughout the world given the project's sponsors".

Among the recommendations is that all companies should have a formal, written, audit committee charter; that audit committees should have direct and sole responsibility for the appointment of external auditors; and that a letter from the audit committee should be included in the financial statements of public companies.

The report follows the publication last November of a Security and Exchange Commission nine-point plan which sought to reverse what it saw as a decline in financial reporting standards.