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:
The second largest improvement in ‘significant’ levels of financial distress since the EU Referendum was in professional services, found research from Begbies Traynor
Just one half of UK practices have implemented a pricing structure around auto enrolment implementation and advice - with many suffering increased costs
Deloitte's north-west Europe foray; BDO, Smith & Williamson investment paths; Shelley Stock Hutter; and Wilkins Kennedy discussed by editor Kevin Reed on our Friday Afternoon Live broadcast
Accountants should alter their perspective on auto-enrolment to maximise business opportunities, according to Eric Clapton.