UPDATE 1-UK company directors face personal liability for financial statements - sources

(Adds ministry statement)

LONDON, Feb 5 (Reuters) - Company directors would become
personally liable for the accuracy of their financial statements
under landmark proposals from Britain's finance ministry next
week to improve corporate behaviour, sources familiar with the
plans said on Friday.

Directors would have to vouch for the accuracy of financial
statements in a version of the Sarbanes-Oxley regime introduced
in the United States to crack down on accounting fraud after
energy company Enron collapsed, the sources said.

Currently, liability for the accuracy of corporate financial
statements rests with the company.

Britain's business ministry is expected next week to publish
long-awaited reforms to raise quality and competition in company
audits after a string of collapses and accounting scandals at
companies such as retailer BHS, builder Carillion and cafe chain
Patisserie Valerie.

Three government-backed reviews of the audit market set out
a welter of recommendations to boost competition in audit and
strengthen supervision of accountants to improve standards.

Legislation is needed to implement some of the key
recommendations, but parliamentary time has been clogged by
Brexit and COVID-19 for the past two years or more.

"The government has accepted the findings of three
independent reviews into audit and corporate reporting, and is
committed to acting on their recommendations," the business
ministry said on Friday, adding that comprehensive proposals
would be published shortly.

"Strengthening our corporate governance and audit regime
will help to ensure that the UK remains a world leader in
corporate transparency and advance its status as a place of the
highest standards in audit," the ministry said.
(Reporting by Huw Jones. Editing by Jason Neely and Mark
Potter)

Carillion Plc