U.S. plans full probe of big accountants

An official of the new U.S. accounting oversight board outlined plans for full inspections of the Big Four accounting firms next year, The Wall Street Journal reported on Friday.

The official, head of inspections George Diacont, said he intends the inspections to go beyond client engagements and into how the auditors run themselves, the paper reported. Quality-control measures, the tone of top management, compensation and promotions could be addressed in the inspections, he said according to the report.

Diacont discussed the plans at a financial reporting conference in New York, the Journal said.

The group, the Public Company Accounting Oversight Board, had vowed to conduct at least a limited inspection of the Big Four — PricewaterhouseCoopers [PWC.UL], KPMG [KPMG.UL], Deloitte & Touche [DLTE.UL] and Ernst & Young [ERNY.UL] — this year.

The firms, which audit the majority of large U.S. companies, have come under fire since accounting scandals at Enron Corp ENRNQ.PK , WorldCom WCOEQ.PK , and other companies.

Also at the conference, Charles Niemeier, who is the board's acting chairman, said the board was in talks with foreign regulators, including those from Australia, Canada, Italy and the United Kingdom, the Journal reported.

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