Senior executives may be aware of the millennium bug, but they do not fully understand the implications to their systems and are not taking action quickly enough.

According to PA Consulting Group's latest survey of 1,000 firms worldwide, while awareness is high among IT professionals, only 55 per cent appear to be fully aware of the implications and the likely costs involved.

Jason Hill, a managing consultant at PA, said: 'The number of those taking action is not as high as we had hoped. In our previous survey of 100 UK firms published in February, 66 per cent claimed to be in the middle of audits. But of those polled in the recent survey, only 39 per cent have completed audits. This is not good.'

Hill attributed the slowness to projects starting late and the long effort to raise awareness. PA plans another survey in the summer, by which time Hill expects companies to be well into the testing phase.

About half of the companies surveyed have yet to implement a formal year 2000 programme, despite the same proportion saying they will feel the force of the bug next year.

The original cost estimates have also been blown out of the water for many bosses. The total cost of fixing the problem is now estimated to be $4.7 billion worldwide, with an average price tag of $6.9 million per country.

Large organisations are lagging behind smaller enterprises in terms of awareness and action. Only 43 per cent of senior managers are aware of the problem in smaller companies, compared with 73 per cent in large organisations.

PA advised firms to put their best project managers on the case, examine their entire supply chain and draw up a contingency plan. It also recommended that users put pressure on their suppliers to carry out adequate tests on their products and publicise the results.