And in a year-2000 double whammy, accountants also fear they will face a wave of litigation from clients over computer failures triggered by the computer problem.
A partner at a Glasgow-based chartered accountant, who asked to remain anonymous, told Accountancy Age this week that his bill for PI cover for 1999 had rocketed by over 20%.
He said his insurers had told him the bill’s rise was ‘solely attributable to the cover which pertains to any problems applicable to the millennium bug.
‘The increased premium should be applicable to the ensuing calendar year,’ the partner added.
This may be at the top end of rises, according to Victor Knope, MD of Bradstock Professional Liabilities, an insurance broker that specialises in accountancy. ‘None of my clients has paid more tax for year-2000 cover,’ he said.
But he predicted a ‘proliferation’ of claims against accountants from next year. ‘The majority of them won’t succeed but there’s still the problem of legal costs,’ he said.
Joanna Sanderson, a legal adviser at Ernst & Young, said auditors were not required to assess a company’s millennium compliance project.
‘My main concern is that the public will assume a clean audit means a company will come through the year 2000 smelling of roses,’ she said.
She added: ‘Auditors’ responsibilities with respect to the year-2000 problem are really quite limited.’
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