Investors back restrictions on auditor liability
Association of British Insurers says any move by accountants to agree a statutory limit on auditor liability would breach corporate governance principles
Investors will oppose auditors’ plans to push for statutory limits on their
liability, in a move that dashes accountants’ hopes for a speedy change to the
law, the Financial Times has reported.
Auditors face unlimited liability and have long lobbied to have this reduced,
the newspaper said.
Changes to UK law last year allowed them to seek a limit in agreements with
each of their clients, but the likelihood of any such deals being struck has
been effectively quashed by the opposition from the US Securities and Exchange
Commission to any US-registered UK companies doing this, the FT said.
Peter Montagnon told the FT that any move by accountants to make
current optional liability limits statutory would be ‘a problem’ for the ABI,
which represents many of the biggest institutional investors.
Further reading:
Limited
liability agreements blocked by US