Sunday, October 06, 2002

P&G auditors keep tabs on firm's finances




By Cliff Peale cpeale@enquirer.com
The Cincinnati Enquirer

        Even before Enron Corp. sprang into the nation's consciousness late last year, Procter & Gamble Co. had tightened its internal audit controls with a program called “Financial Stewardship.”

        Coming out of a 1999 restructuring that jumbled many of P&G's traditional structures, the move signaled an extra layer of review of P&G's finances, from its global business units and geographic units.

        “One of the things we knew right from the beginning was that there was considerable risk, because there were so many people in new jobs,” said P&G vice chairman Kerry Clark, president of market development and business operations.

        The audit committee of P&G's board, headed until now by retired Rockwell International Corp. chairman Don Beall, then went back and looked again.

        The audit committee has become the flashpoint of many corporate boards, as directors scramble to distance themselves from the accounting scandals engulfing many of Wall Street's technology titans.

        “When the Enrons started surfacing, we went back and we looked with the management at all the audit functions,” Mr. Beall said.

        With fairly transparent financials and few off-balance sheet assets, P&G has been relatively immune to the accounting scandals.

        But earlier this year, it was forced to publicly deny that it had been contacted by the U.S. Securities and Exchange Commission about its accounting.

        Cognizant of the increased attention, the audit committee of P&G's board still is taking extra care. At its last meeting, the group conducted another review of new SEC rules and met again with P&G's auditors from Deloitte & Touche.

        “Everyone's waiting for the SEC regulations, so there's a little bit of uncertainty,” said audit committee member Domenico DeSole, CEO of Gucci Group. “Certainly, with the unfortunate situations that have occurred, there's a little bit of a situation now. ... But I'm totally confident in the company here.” E-mail cpealeenquirer.com

        "When the Enrons started surfacing, we went back and we looked with the management at all the audit functions. We started with a clean sheet of paper and satisfied ourselves that we didn't have a problem.'

       



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