The government is coming under increasing pressure to look at auditor liability again, as the profession turns on the arrangements introduced in the Companies Act.

Michael Snyder, senior partner of Kingston Smith and one of the most influential accountants in the City, has added to criticisms of the rules, which have introduced negotiated liability arrangements between auditors and their clients.

Snyder is currently chairman of the policy and resources committee at the City of London corporation, a position he relinquishes today.

‘The government has given an enabling position for [proportionate liability] to be individually organised between auditor and auditee. Frankly this was never going to be as satisfactory as doing it structurally and by law,’ he said.

Snyder’s comments follow suggestions by Baker Tilly’s Lawrence Longe that the government might have to legislate again following an impasse on the issue.

The growing pressure may not mean immediate action however, given the long time-frames for introducing company legislation. Clients are reluctant to sign up to limit their auditors’ liability, meaning negotiated arrangements are not proving practical. The Financial Reporting Council is producing guidance on the issue, but it is only in draft form.

PricewaterhouseCoopers partner Peter Wyman said suggestions of revisiting the issue were ‘premature’.

‘We need to see how things pan out over the next six months to a year before thinking of government legislation or to get anything happening.’

A spokesman for the Department of Business, Enterprise and Regulatory Reform said the department had not received any requests to revisit the regime for limited liability contracts: ‘We will be reviewing the Act [Companies Act 2006] overall in due course when there’s more experience of it operating in practice.’

An FRC spokesman denied blue chip companies were opposed to the agreements: ‘The majority of responses indicate there will not be a fight over proportionality and it will be accepted.’