Last week, the profession would have been heartened to see peers from all
political persuasions laying into the government over its decision to continue
with such penalties. It may not have been so glad to see the government’s
Concerns centre around whether it should be an offence to ‘knowingly or
recklessly’ give an incorrect audit opinion, and what exactly this would
encompass. So it was no surprise to see amendments tabled that would replace the
controversial words with ‘dishonestly or fraudulently’ in a bid to eradicate
doubt over negligence. Amendments were also put forward that would remove the
clause completely, with many arguing that reckless auditors would be caught by
Former KPMG partner Baroness Noakes also raised the spectre of the new
offence actually interfering with established disciplinary procedures,
especially those of the Accountancy Investigation and Discipline Board.
She argued that if partners take individual legal advice over any
investigations ‘that advice would almost certainly be not be able to co-operate
with the AIDB’, while any criminal prosecution would halt AIDB proceedings.
But Lord Sainsbury of Turville, representing the government, still insisted
that the criminal offence should stand, as a vital part of a deal that will
allow auditors to negotiate proportional liability with their clients.
While assurances have been given that the subject will be looked into again,
there is still a sense of resolution to stand firm from a government that has
already dropped the potential jail sentence and looks unwilling to go further.
Simon Wright of CareersinAudit.com discusses how an effective cyber defence force is critical to businesses worldwide and how internal auditors can make the transition to a new career in cyber security
The FRC has said that the investigation will 'consider, but not be restricted to, issues regarding misstated accounting balances'
Craig Maxwell joins the audit and assurance team in Scotland
Stephen Grayson to join the audit department in Manchester