Computing (UK)

13th March, 1997

Auditors fear Year 2000 havoc

Big Six auditors fear that hundreds of their clients are failing to overhaul essential computer systems in readiness for the millennium date change, which experts predict could wreak havoc across large parts of the UK's industrial, commercial and financial sectors.

Auditors believe most are aware of the problem, but have yet to determine the extent of the threat. They are concerned they will have to qualify the accounts next year of companies which cannot prove their computer systems can cope.

A spokesman for Price Waterhouse said: 'We have seen a significant increase in enquiries over the last four months, but not a large increase in work.'

Martyn Thomas, head of Year 2000 services at Deloitte & Touche, agreed. 'Most clients have started late and those which have got underway have found it a bigger problem than they thought.'

The Big Six accountancy firms are set to spend millions of pounds on converting their own systems. They all said they were well advanced with studies to assess the extent of their problems, though Price Waterhouse IT boss David Graham admitted the US arm had faced delays. 'The systems are older in the US and many are written in-house.

IT consultancy Gartner Group believes 20% of millennium-related problems will occur this year. Thomas said one of the first crucial dates would occur on 7 April, which is 999 days from the millennium. Companies which set 999-day expiry dates on their computer programs could discover the software has been deleted on the day it goes live.

The threat results from the fact that computer systems use a two-digit format to show the year.

Last week, Science and Technology Minister Ian Taylor told businesses that Government departments would refuse to deal with companies after December 1998 that failed to make the necessary changes.

Gerry Acher, head of audit at KPMG said: 'It will be up to auditors to rattle the cage if (the millennium) reveals a weakness in internal controls.'

© 1997 VNU Business Publications Ltd

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