Investors look for liability payback

Investors are expected tomorrow to push the profession to act on the issues of competition and auditing standards at the first meeting of the Audit Quality Forum since limited liability for auditors was proposed to parliament.

The AQF, which brings together representatives from the profession, banking, investor bodies and government, will convene for the first time since May to discuss project developments and future direction.

But investors now expect to see some developments on the key issues on improving the quality of audits now that auditors have had their wish granted on liability limitation.

Investors had acquiesced to the limitation agreement in return for a reinforcement of the true and fair view in legislation, but one investor representative at the meeting described those negotiations as 'like suddenly finding yourself standing on a landslip - losing what you thought you already had'.

However, AQF chairman Gerald Russell said that an important part of the meeting will be managing the expectations of the forum.

'We don't want to open the lid on Pandora's box,' said Russell. 'But on the other hand we do want to produce something in six to nine month's time which is useful to users of accounts.'

On the subject of International Standards of Auditing, Russell said any discussions had to be 'practical'. 'ISAs are adopted and they are here to stay,' he said. 'It will not be about whether we should adopt them - that would be a futile debate - it will be about how we can adopt them and how we can influence them.'

Russell also anticipated that the government's decision to drop the mandatory Operating and Financial Review will be a hot topic at the meeting, a decision he described as 'astonishing', although the subject may not make it onto the forum's agenda.