Investors have claimed that a crucial part of the new auditor liability rules
included in the company law reform bill has been ditched, leaving them with
little to show for their lobbying efforts as the government looks set to rush
the bill through parliament.
Accountancy Age has seen a memo sent by a senior investor and
thought to be intended for fellow investors, which analysed the bill’s clauses
and outlined a series of complaints. The memo highlighted a missing ‘override’
in the bill which was expected to reinstate the concept of ‘true and fair view’
to audit reports.
‘In practice, of all the quality reforms investors raised, the only (and
minor) one achieved was for the audit partner to sign the audit report. Sad but
true,’ it added.
Investors feel the bill limits auditor liability, which has been part of UK
case law for some time, unnecessarily.
The government plans to complete debate on the bill by 13 July, despite
strong attempts by the Conservatives and Liberal Democrats to allow further
Conservative spokesman Crispin Blunt said more clauses were being prepared to
consolidate elements of company law that were not even ready in draft form. The
deadline ‘will not enable us to do our job properly’, he claimed.
After losing a vote on the timetable due to Labour committee member Keith
Vaz’s absence, a plan to complete consideration by the middle of July was pushed
through on Tuesday with all Labour members present.
The debate on the bill has also become heated. Blunt said important elements
would not receive proper consideration and accused ministers of ‘dreadful
arrogance’ and of mismanagement of ‘the biggest bill’ the Commons was ever
likely to consider.
Industry minister Margaret Hodge said most of the bill had already been
discussed in detail in the House of Lords and many opposition amendments were
going over ground already debated.
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