PracticeAuditInvestors look for liability payback

Investors look for liability payback

Investors expected to push auditors on competition issues at tomorrow's AQF meeting

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.

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