PracticeAuditGovernment allays fears over new audit offence

Government allays fears over new audit offence

Audit fears allayed over the introduction of new audit criminal offence; the provision will not be retrospective

The government has allayed fears that the introduction of a new criminal
offence for auditors who ‘knowingly or recklessly’ include anything that is
misleading would be applied retrospectively.

Stephen Timms MP, in one of his first speeches since taking on the role of
minister of state for competitiveness at new business department
DBERR ,
said that the new provision would come into effect for audits of financial
reports for periods beginning on or after 6 April 2008.

Some had feared that the provision could apply to audits retrospectively.

‘We have said we plan to commence the new offence in April 2008. Members of
the audit profession have quite reasonably asked us to clarify exactly what this
means. I am happy to announce today that this new provision will come into
effect for audits of financial reports for periods beginning on or after 6 April
2008, and not for reports on any earlier periods,’ Timms said during a speech at
the ICAEW headquarters today.

‘I am delighted that the government has listened to the concerns of the
Institute and others in the profession and has taken on board our request that
the new provisions should not apply retrospectively to audit work performed
before the implementation date. Our goal has always been to ensure that the
quality of the audit is maintained,’ said ICAEW chief executive Michael Izza.

Further reading:

Audit quality: a dangerous
path

Hopes build for end of
‘reckless’ audit law

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