Liability guidelines in pipeline

Details on how auditors will be able to negotiate proportionate liability by contract with their corporate clients are expected to be published by the government next month.

Link: Auditors get US boost in liability battle

Ministers have been working towards producing regulations that could be included in the draft companies bill, since an agreement was reached between accountants and investors at a meeting brokered by DTI minister Jacqui Smith in December.

A spokeswoman for the DTI said that details were now being finalised on the issue of proportionate liability and that these will be presented ‘fairly shortly’. It is thought that a public announcement will be made sometime during March. The government will be keen to see that progress has been made by the Audit Quality Forum before details are released.

The forum comprises representatives from the ICAEW, ICAS, the UK’s top six accounting firms, the DTI, the Financial Reporting Council, investors such as Hermes, Morley and Old Mutual, and business groups such as the CBI, the Institute of Directors and the Association of British Insurers.

The next meeting of the forum is on 7 March, where the progress made in recent months on key areas will be up for discussion.

The ICAEW’s audit and assurance faculty is expected to present papers on the validity of the UK adopting the Australian model for allowing shareholders to question auditors, the publication of the letter of engagement of auditors by companies and work on auditors resignation letters.

Related reading