Calif. Panel Proposes Rules on Accounting

A state panel that oversees and licenses the accounting industry is debating new rules to limit outside consulting and require accounting firms to keep more records of their work.

The California Board of Accountancy proposed the rule changes in the wake of Enron Corp.’s record bankruptcy and questions about whether its accountant, Andersen, properly certified its financial statements. The Board of Accountancy licenses more than 62,000 accountants and can investigate and discipline them.

“We need a standard that says working papers need to be retained for as long as the financial documents are needed for public consumption,” Michael Granen, the board’s lawyer on loan from the state attorney general’s office, said during a hearing in San Francisco.

Enron filed the largest U.S. bankruptcy Dec. 4, wiping out $26billion in market value and leaving thousands of workers unemployed.