PracticeAuditInstitutes attacked by investors

Institutes attacked by investors

Investor groups are set to launch an intensive lobbying campaign to ensure plans to limit auditor liability are only approved if accompanied by essential safeguards.

Link: Audit cap may sneak into companies bill

It emerged this week that Morley Fund Management, one of the biggest funds in the UK, is planning to counter arguments from the profession by demanding changes to the legal framework surrounding auditors and the beefing up of audit standards before a limit to liability is introduced.

Accountancy Age has learned that several other investment bodies ? including the National Association of Pension Funds, the Pensions Investment Research Consultants, the Association of British Insurers and fund manager Hermes ? could take similar action before the consultation period on a cap closes on 12 March.

It is understood that investors will question the need for urgency in reviewing auditor liability amid fears the profession is attempting to ‘hijack the debate’.

‘We are not comfortable with the accounting profession?s attempts to railroad the debate on auditor liability,’ said Iain Richards, head of governance at Morley, which is responsible for nearly £97bn of assets in the UK. ‘Any change needs to be in context and appropriate.’

Richards argued that changing the liability for auditors by itself was not acceptable within an industry that had already done a lot to reduce its exposure. Among other issues, he said the breadth of audit reports and auditors’ accountability needed to be addressed. ‘The profession will change nothing that affects its economic interests,’ he added.

These concerns have been shared by Peter Montagnon, head of investment affairs at the ABI. ?The general feeling is that people are wary of capping liability,? he said.

Peter Wyman, former ICAEW president, said: ‘The debate the investors want, we also want, but there is an urgent need for liability reform and the opportunity to get it in the companies bill. There is not enough time for a wider debate for this bill.’

Related Articles

Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

Audit Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

5d Emma Smith, Managing Editor
PCAOB sanctions former Deloitte Turkey CEOs over altered documents

Audit PCAOB sanctions former Deloitte Turkey CEOs over altered documents

1w Alia Shoaib, Reporter
KPMG South Africa to review past audit work amid fresh scandal

Audit KPMG South Africa to review past audit work amid fresh scandal

1m Alia Shoaib, Reporter
FRC introduces £10m sanctions for Big Four firms

Audit FRC introduces £10m sanctions for Big Four firms

1m Alia Shoaib, Reporter
Ukraine’s PrivatBank files $3bn claim against PwC

Audit Ukraine’s PrivatBank files $3bn claim against PwC

2m Alia Shoaib, Reporter
Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

Audit Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

2m Alia Shoaib, Reporter
Big Four dominate FTSE 250 audit market in Q1 rankings

Audit Big Four dominate FTSE 250 audit market in Q1 rankings

3m Alia Shoaib, Reporter
Deloitte to pay $149.5m over Taylor, Bean & Whitaker audit failure

Audit Deloitte to pay $149.5m over Taylor, Bean & Whitaker audit failure

3m Alia Shoaib, Reporter