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This paper examines post‐Enron developments in UK audit and corporate governance regulation. It considers the latest government‐initiated reviews into audit regulation, specifically those conducted by the Co‐ordinating Group on Audit and Accounting Issues and the DTI Review Team, and into corporate governance, specifically those undertaken by Derek Higgs and Sir Robert Smith. The paper notes that the reviews were undertaken in the context of developments initiated both before and after the collapse of Enron, including, respectively, the new system for the regulation of the UK accountancy profession as established by the Accountancy Foundation, and the US Sarbanes‐Oxley Act. The reviews have been welcomed by government and thus should play a large part in setting the agenda for the future regulation of UK audit and corporate governance. The proposals for auditing share a number of characteristics with the recommendations of a pre‐Enron empirical study which investigated the regulation of UK listed company audit, although significant distinctions remain. The proposals for corporate governance continue the ‘comply or explain’ approach and do not recommend passing its regulation from the Financial Reporting Council to another independent body of ‘stature’ such as the Financial Services Authority (FSA). It is concluded that key to successful implementation of recent proposals will be the need, for audit, to demonstrate that there is no cosy relationship between regulators and the auditing profession, especially the ‘Big Four’ firms, and, for corporate governance, a willingness to look outside the ‘one‐size‐fits‐all’ approach.

Many of us who believe that governments continue to grow relentlessly, at least in the economically advanced countries, have been criticized by analysts who claim that in fact the growth of government has petered out or slowed substantially. Those who advance such claims perceive us to be needlessly alarmed, and they fault us for a failure to acknowledge the decisive turn of events associated with the so-called Reagan and Thatcher revolutions of the 1980s. Not to worry, they exhort us; the statists are on the run, and a brave new world of market-oriented liberalism shimmers on the horizon (Boaz, 2003).

The results of recent surveys of businesses indicate that cash flow is the single most important problem they face. The business press has noted that “cash‐flow planning is one of the more difficult and vulnerable areas in business management,” and that “businessmen can't understand why…they [are] running out of cash.” In fact, it's safe to suggest for companies of any size that cash is the lifeblood of the firm, and that a company's cash‐planning practices can be a critical early warning device of impending financial trouble.

The term “dynamics of interventionism” refers to a social process, i.e., a sequence of adjustments to change over time, among a great many individuals, who largely share a common set of rules of interaction.¹ It is constituted by the unintended consequences at the interface between the governmental and market processes, when the scope of government is either expanding or contracting in relation to the market. Interventionism is the doctrine or system based on the limited use of political means (i.e., legitimized violent aggression (Oppenheimer, 1975[1914])) to address problems identified with laissez-faire capitalism. Thus, an intervention refers to the use of, or the threat of using, political means to influence non-violent actions and exchanges. Supporters of interventionism do not completely reject the institutions of capitalism, such as private property and the price system, but do favor using piecemeal interventions that extend beyond so-called minimal-state capitalism² in order to combat suspected failures or abuses they associate with the unhampered market. Examples of this would include, but are not limited to, market power, externality, asymmetric information, income inequality, racial and sexual discrimination, and the business cycle.

WE all scan the advertisements for librarians in The Times Literary Supplement and other journals every week, and we might be forgiven for inferring from them that there is a dearth of those who, by a curious inversion, are asked for as “A.L.A's or F.L.A's.” In contradiction, it would appear that about 1,500 youngsters are trying to enter the profession by way of the Entrance Examination every year. Youngsters beginning life, especially girls, do usually prefer or are constrained by their parents, the cost of living, and the scarcity of lodgings, to start in their home towns and still to live at home.. Higher in the scale the whole position is tangled in various ways. Many of the entrants fall by the way; commercial pay exceeds municipal and other library pay; more find the work uncongenial, as library work certainly is except to those who are book‐lovers, have a strong social sense, and, in the best cases, a flair for publicity and business administration. Others marry and leave, although some stay on with the ring on the third finger of their left hand. Thus, when maturity is reached, only a relatively few, even amongst the mature, have become chartered librarians and, fewer still, Fellows—as is natural seeing that the fellowship is a much more severe test nowadays and only much love and industry can achieve it. This position is even worse in some other branches of the municipal service; our salaries do not draw the best of the young folk permanently and many a Treasurer's office, to take one branch only, is complaining of want of good recruits. Those of our good ones who do remain do so because of the work and not the pay. Authority has always known this, from the day when Gladstone opined that working in the British Museum was so delightful that it was incredible that the workers wanted any pay at all. Chief librarians today have been most unfairly neglected by the salary negotiating bodies who have dealt generously with several other kinds of chief officers in the local services.

In almost all aspects of social life government intervention seems much more pervasive and intrusive today than ever before – at least in many of the Western countries. Governments seem year by year to consume still more resources and to regulate the details of the actions and interactions of their citizens still further.

In the aftermath of the Enron scandal, the critics of free enterprise have blamed this system for inflated and out of control executive salaries, particularly those of the chief executive officer (CEO). The present paper defends the marketplace against these charges. In section I we argue that the market has passed the Enron test with flying colors. Section II gives the background of the financial situation relating to CEO salaries. Sections III and IV are devoted to, respectively, the tax court and the appellate court; section V looks at the reaction of the former to the latter; and in section VI we defend the “independent investor” test. We look at this issue from a political economic perspective in section VII and conclude in section VIII.