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According to the Forum of Private Business (FPB), new guidelines issued by the Auditing Practice Board will prevent accountants from providing tax and general business advice to their audit clients. It claims this will force businesses to employ two different accounting firms to satisfy their audit and business advisory needs.
The Forum of Private Business Chief Executive Nick Goulding said the new rules will potentially cost small businesses thousands of pounds in new accountancy fees.
He said: "In practise many firms may just cease to go to accountants for advice. This will be damaging to both accountants and businesses. If they do approach a new partner time and money will be taken up explaining the business to an unfamiliar accountant.
"Once again small businesses will have to suffer the consequences of regulators failing to 'think small first' and take into account the contribution made by the sector to the UK economy, (see notes to editors). These guidelines are all well and good when applied to FTSE 100 and other large organisations, yet for small businesses they will just add more costs and stifle a source of business advice favoured by many in the sector."
The Association of Chartered Certified Accountants President John Brace has slammed the new guidelines.
He said: "The issues of big firm auditor independence which dominated scandals such as Enron do not have the same relevance for small businesses - which are the backbone of the UK economy. The public interest in small businesses is to ensure that they are properly run. These proposals will just make it harder for small businesses to get professional advice at a reasonable cost. Their voice should be heard."
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Susie Hughes © Shout99.com 2004
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