Company directors face criminal penalties from today, if they fail to disclose relevant accounting information to auditors.
Amendments in the Companies Act require directors to sign declarations that they have not concealed any material information from auditors. If they are subsequently found to have done so, they can face fines or imprisonment.
Auditors are also being given powers to demand information from a broader range of people at their client companies. As well as directors, they can request figures from anyone who handles or is accountable for financial statements.
The moves are part of legislative changes made to reduce accounting fraud and restore investor confidence, in the wake of fraud cases such as Enron and Worldcom.