At a meeting of auditors, shareholders and business groups yesterday, Smith agreed to limit auditors’ liability against negligence claims in exchange for a criminal sanction for recklessly issuing a misleading opinion and increased disclosure for shareholders.
If Labour wins the next election, it is expected the bill will be introduced in the middle of 2005.
Following the collapse of the former Big Five firm Andersen in 2002, auditors stepped up their campaign to limit their liability, arguing that a single claim could bring down another large accountancy firm.
Currently, when a company fails, auditors can be sued for the bulk of any loss, even if they aren’t wholly to blame, while company directors and other parties often escape catastrophic financial claims because auditors are viewed as having deep pockets.
Auditors will also have to explain in more detail why they have resigned an audit, something they have been keen to do for a number of years.
Two new audit partners have been appointed at the firm BDO in its audit practice following continued growth and investment
Investment in people, tech and businesses impacts on EY's profit per partner figure
If businesses do not take cyber security seriously in their business planning regulators may do it for them, the ICAEW has warned
Dr Richard Willis provides a several thousand-year history lesson of the profession, from origin to modern-day