Such a fund would be a no-fault system under which an independent organisation would rate damage and then charge it to a pool maintained and funded by participating firms.
The idea, raised by Sir Peter Kemp, an accountant and one time Treasury official, has already met with some support from the ICAEW’s audit faculty and would reduce the possibility of public battles such as Ernst & Young’s pursuit of Coopers & Lybrand, now part of PricewaterhouseCoopers, over the collapse of Barings bank.
Writing for Accountancy Age, Sir Peter said: ‘It’s not an encouraging sight to see the four or five firms, which between them audit the bulk of the world’s big enterprises, bickering among themselves in this way.’
He added: ‘No doubt other systems could be devised. But the profession, the big firms and the government should take this issue seriously by looking for a way of combining an avoidance of unhelpful court cases that damage the profession, with a maintenance and improvement of personal standards.’
Support for Sir Peter came from Gerry Acher, chairman of the ICAEW’s audit faculty who described the current system as ‘arthritic and inordinately costly’.
But Acher says establishing an alternative will not be easy.
‘At least Sir Peter’s wake up call is timely, to be applauded and must act as a catalyst for some more out the box thinking.’
Read this week’s opinion pieces:
Andrew Tyrie airs views on the Finance Bill, 'Making Tax Policy Better' report, and Brexit
In our latest managing partner Q&A looking towards 2017, CVR Global's Richard Toone talks about recruitment, and the potential threat of competition from the legal sector, as key issues for the firm in the coming year
Deloitte to avoid tendering for government contracts over the next six months, to appease Theresa May following consultant's report that painted a less-than-flattering picture of Brexit plans
In our first Q&A looking towards 2017, Menzies senior partner Julie Adams flags up increasing digitisation, aligned with more hands-on consultative services, as the key mix for her practice