Computing (UK)

Dan Sabbagh

March 20th, 1997

Accountants gear up to audit 2000 compliance

Auditors Deloitte & Touche and Arthur Andersen plan to warn shareholders that they risk losing everything if they invest in businesses which fail to make their systems year 2000-compliant.

Deloitte & Touche expects to start auditing companies millennium strategies from the end of this year. Large companies could face the dramatic sanction of having their accounts qualified.

The auditor will begin with businesses, including insurance companies, which deal in long-term contracts, and will audit all other business' plans from the end of 1998.

Firms whose efforts are deemed insufficient will have their accounts qualified on a 'going concern' basis. This means there is a reasonable expectation the business will not survive the year ahead.

Bill Comyn, Deloitte & Touche's national director of accounting and auditing, said: 'The millennium will become a standard consideration for accounting.'

The firm intends to issue official guidance to its auditors in the autumn of this year.

Arthur Andersen also confirmed that, nearer 2000, it would qualify annual accounts. It was not prepared to state its plans in any detail. A spokesman said: 'It is not a matter that should lead accounts to be qualified at this stage.'

Deloitte & Touche's Comyn believes that some companies will have their accounts qualified: 'Some businesses will go to the wall - probably those who are already financially weak. The millennium will be their final straw.'

© 1997 VNU Business Publications Ltd

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