Tweedie predicts global take-up of liability moves

Sir David Tweedie has predicted that the adoption of IFRS by the United
States could see liability limitations also go global.

The IASB chairman
believed it would be all-or-nothing as to whether companies accepted the
controversial measures, when companies on both sides of the Atlantic were
operating under the same set of financial standards. ‘You will find that we will
see a lot of things like liability and commercial law, all come into line after
global alignment [of reporting standards].

‘There is too much danger for the firms. Nobody wants another Andersen,’ Sir
David told Accountancy Age.

The issue of liability limitation is at a delicate stage, with the US
tentative about joining European efforts to reduce firms’ risk, and potentially
scuppering plans for multi-nationals listed on US markets.

Some companies have also baulked at the idea of limiting auditors’ liability.
While the ability for an auditor to limit its liability exists in law, it is not
thought that any companies have yet signed up to the plans.

Sir David was speaking at the ICAS conference which also saw the SEC’s chief
accountant Conrad Hewitt flesh out proposals for IFRS adoption. In unveiling the
plans, the US markets watchdog has taken a major step towards the conversion,
which is slated to come into force for all US companies by 2014.

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Fiona Westwood of Smith and Williamson.