The British Government could force accountants to be more open about their profits, and may abolish self-regulation, in an effort to boost the industry's image and prevent future Enron-style scandals.

The Department of Trade and Industry (DTI) will this week publish the results of a review of the UK accounting industry.

According to a series of weekend press reports, proposals may also include the mandatory rotation of company auditors, and enhancements to corporate audit committees.

But the review, which is not due to produce definitive findings until later in the year, is believed likely to stop short of recommending a break-up of the biggest accounting firms on competition grounds.

Since the collapse of Enron late last year, and a string of mainly US-based accounting scandals since then, the role of company auditors has come in for severe criticism.

Waiting for action

In a number of interviews since Enron, Trade Secretary Patricia Hewitt has made it plain that she does not consider the UK immune to accounting irregularities.

Ms Hewitt says Enron-type scandals could happen here

"It would be crazy to say it can't happen here," she told the BBC earlier in July, adding that such scandals had demontrated a "much too cosy relationship between finance officers or chief executives and their auditors".

But so far, the UK Government has given little concrete indication of how, if at all, it wants corporate law to be reformed.

On both sides of the Atlantic, there have been calls for tough new rules on accounting companies, forcing them formally to split their auditing and consulting practices.

Whistling up a watchdog

This week's report is believed unlikely to go that far.

Enforced rotation of company auditors is also being fiercely resisted by the accounting industry, and may not ultimately be adopted, reports say.

But the abolition of self-regulation - a project already under way in the US - would be a major step.

The Observer newspaper reported that the DTI was mulling the creation of an accounting watchdog, independent of the industry.

This move could go hand in hand with tough new disclosure requirements for accountants, which as privately-owned partnerships currently have little obligation to throw open their own books.

Self-help

In the meantime, some accounting firms are taking steps themselves.

KPMG, one of the "Big Four" international auditing firms, is reviewing its procedures after being implicated in a number of controversial cases.

The company has come under fire for its involvement in the accounts of Xerox and biotech firms Elan and Bioglan.

According to media reports, KPMG reforms could include a greater emphasis on vetting the management of client companies, in an effort to weed out firms with a propensity to cut corners.