An opportunity to improve the quality of corporate reporting.

Colin Beggs, CEO of PricewaterhouseCoopers, says there is a worldwide crisis in corporate reporting.

Beggs says the crisis was hastened by the Enron bankruptcy and the swift shattering of a major global accountancy firm. Other collapses of substantial magnitude followed.

There had been criminal and civil litigation against management, boards of directors, financial institutions, analysts, auditors and law firms, he says.

In the US there are "angry congressional hearings" and pressure by and on the Securities Exchange Commission towards new rules and regulations.

Beggs says the Sarbanes-Oxley Bill requiring auditors in any country outside the US to submit to the onerous conditions of US law was a "far-reaching example of the extent of reform".

However, he says the corporate crisis provided an opportunity for solutions. If well thought through, it was an opportunity to improve the quality and transparency of corporate reporting and to rebuild the public's trust and confidence.

He says there has been a spotlight on the role of auditors, the classic example being Enron where we "saw this participant being elevated to the star of the show".

But as matters have widened, and with more reflection on new failures occurring, attention has now been drawn to the role of others in the corporate chain, such as management, governance boards, company executives, information distributors, investors and other stakeholders.

Beggs says that the second King report on corporate governance in SA is of a "world-class leading standard". If brought into action properly, the report should significantly elevate the quality of SA's boards of directors and management and how they interacted with controls, risks and governance in an ethical and accountable manner.

Beggs says it is possible to improve the corporate chain. Consideration should be given to enveloping the workings of management and boards by an over-arching public oversight mechanism.

He says it should be borne in mind that the second King report on corporate governance was a voluntary code. He says it is important that the Companies Act should be updated to ensure compliance with the key elements of the King code.

Beggs says the SA Institute of Chartered Accountants has recommended to Finance Minister Trevor Manuel that a public oversight board be introduced to oversee the regulation of the auditing and accounting profession. Other recommendations included better focus on the review of work standards and improved disciplinary procedures.

He says government has to give careful consideration to a number of practice issues, including the rotation of auditors and the scope of service that auditors may offer to audit clients.

SA has not spent much effort on the role of information distributors and the inconsistency of information provided to stakeholders, he says. SA's foundation of enabling technologies should include early adoption of extensible business reporting language (XBRL), and use of the internet for business reporting purposes needs significant development, he says.

Beggs says that fundamental conceptual accounting debates have to be resolved and there has to be global agreement on rules.

The moves to converge international and national accounting standards need acceleration around the globe, he says. Beggs says there has to be effective reporting on management's performance in areas such as risks, ethical standards, product quality, employee satisfaction and product innovation.

With acknowledgements to Business Day.