THE knock-on effect of high-profile accountancy scandals in the US and Italy is still being felt locally. The Association of Chartered and Certified Accountants believed that new accounting and auditing standards would pose a problem to Guernsey businesses and practising accounting firms.

A new ‘exposure draft’ on audit ethics issued by the UK’s Auditing Practices Board suggested that accountants and financial advisors should no longer be able to provide audit services for those clients to which they also provide taxation and accountancy services.

Jonathan Beckerlegge, ACCA’s council representative for the Channel Islands, said: ‘The ethical clampdown follows the recent corporate failures such as Enron and Parmalat.

‘This is welcomed, but it could result in the loss of the valuable ﾓone-stop shopﾔ for businesses to seek reliable and credible advice.

‘In its current format, the draft could present a reduced choice for businesses when selecting an advisor and increased costs for entrepreneurs. The APB should consider the effect on smaller companies.’

Mr Beckerlegge was speaking at an ACCA Channel Islands conference at St Pierre Park Hotel and said it was not the only important issue to face the profession.

New international accounting standards, scheduled for 1 January, will also represent a challenge for businesses and accountants.

Initially the move to using a single set of standards will affect only stock exchange-listed companies, but all others are expected to follow suit.

Mr Beckerlegge said that the change to IAS could be significant to reported earnings – and therefore taxable profits – and balance sheets.

Nick Le Huray, president of the ACCA’s Channel Islands members’ network, said: ‘Our annual CI conference came at a perfect time because of a number of issues which are due to affect local firms.’

Also on the agenda were the Finance Bill 2004, changes to both the Guernsey and Jersey tax structures ahead of 2008 and offshore tax planning.

Mr Le Huray said that clients were asking ACCA members what the implications of the new zero tax rates for companies in 2008 would be.

‘Because of the publicity in the local media, accountants on the islands are receiving calls from clients, but at the moment we are able to tell them only what we think is going to happen as the detailed legislation is not yet available.’

Specsavers managing director and co-founder Doug Perkins gave the after-dinner speech on the first evening of the three-day event.