Bermuda a new methodology which represented a major advance in auditing financial statements.

The Business AuditSM is over three years in the making and the firm said it represents the latest and most significant enhancement ever of Arthur Andersen's assurance methodology.

Managing partner of Arthur Andersen in Bermuda, Scott Hunter, said the new process was a huge step forward for the accountancy profession, and for clients.

He said the firm will apply the methodology to many of its largest Bermuda audit engagements this year and expects full implementation across all engagements worldwide by 1999.

Mr. Hunter said, "Our clients will receive improved financial statement audits and more insight to better manage their business risks.

"The result will help clients improve their financial reporting processes, enhance their business performance, and reduce damaging business and financial reporting surprises.

"The Business Audit is superior to traditional audit approaches for two reasons. First, it focuses on business risks, the underlying causes of financial surprises -- not just on accounting records.

"And second, it shifts the focus from simply inspecting the quality of a financial statement to actually building quality into the processes that control financial reporting and business risks.

"This is a fundamental change in our approach. The Business Audit marks the first time that a firm has been able to deliver the systems, tools and expertise necessary to bring to the financial reporting and assurance process continuous quality improvement methods that have enabled worldwide manufacturing companies to dramatically improve quality over the past decade.'' More than 125 teams in ten countries field-tested The Business Audit with overwhelming favourable client reaction.