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

The ‘uncomfortable truth’ behind FRC’s Big Four fines recommendations

Audit The ‘uncomfortable truth’ behind FRC’s Big Four fines recommendations

5d Carl Johnson, Stephensons
BDO holds off Big Four to retain top position as AIM auditor

Audit BDO holds off Big Four to retain top position as AIM auditor

6d Alia Shoaib, Reporter
FRC urged to fine Big Four firms penalties over £10m

Audit FRC urged to fine Big Four firms penalties over £10m

3w Alia Shoaib, Reporter
EY to audit Standard Chartered bank

Audit EY to audit Standard Chartered bank

1m Alia Shoaib, Reporter
KPMG replaces PwC as Croda auditor

Accounting Firms KPMG replaces PwC as Croda auditor

2m Emma Smith, Managing Editor
EY fined £1.8m over Tech Data audit

Accounting Standards EY fined £1.8m over Tech Data audit

2m Emma Smith, Managing Editor
Top 50+50: Firms post significant growth in new tax and audit rankings

Audit Top 50+50: Firms post significant growth in new tax and audit rankings

2m Emma Smith, Managing Editor
FRC closes investigation into PwC over Barclays compliance

Accounting Firms FRC closes investigation into PwC over Barclays compliance

2m Alia Shoaib, Reporter