PracticeAccounting FirmsLiability cap: Status quo not an option says ICAEW

Liability cap: Status quo not an option says ICAEW

Quoting a host of liability cap statistics across Europe, the chief executive of the ICAEW has called for a 'fair liability regime' for accounting firms in the UK.

Link: Special report: Liability cap

Responding to Jacqui Smith’s announcement that there would be an inquiry into the competition aspects of auditor liability reform, Eric Anstee said: ‘The status quo should not be an option. The OFT competition inquiry announced by government today must move the liability debate forward.’

Anstee said in Germany there was currently a cap of €4m, with 67 of top 300 companies not audited by the Big Four, while in Austria the limit was set at €363,364, with ten out of the top 50 companies audited outside the Big Four.

‘This is in stark contrast to the UK where there is unlimited liability and all of the FTSE 100 and 248 of FTSE 250 are audited by the Big Four,’ Anstee told delegates at the ICAEW annual conference in London today.

‘A fair liability regime encourages more transparent corporate reporting and enables auditors to exercise professional judgement on matters that go beyond the statutory audit requirements. Without reform, the Operating and Financial Review initiative will be doomed to failure.’

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