The Confederation of British Industry has joined calls from accountants for
the government to scale down its plans for criminal sanctions against reckless
auditors in forthcoming legislation.
In a letter to the DTI, CBI chief Digby Jones said the measures introduced in
the latest draft of the company law reform bill will impose a ‘Sarbanes–Oxley
type burden’ and that the ‘disproportionate’ sanctions introduced will undermine
competitiveness and could lead to a decline in the quality of audit work.
Proposals in the bill, which ended its consultation period last week, include
the ability for auditors to limit their liability to clients but will also see
auditors who ‘knowingly or recklessly’ give an incorrect audit opinion face a
Eric Anstee, chief executive of the ICAEW said the bill, as it stands ‘will
result in criminal charges in circumstances where there has been an honest
He warned that the result would be that the audit profession ‘will be much
more risk averse and less willing to exercise judgement than at present’ and
suggested different drafting could resolve the problem.
Concerns have also been raised by investors that the wording of the liability
clauses allows a cap instead of proportionate liability, while some have also
called for the government to use the bill to reinforce in law the concept of the
‘true and fair’ audit, which is perceived to be under threat from Europe and
international accounting standards.
The second largest improvement in ‘significant’ levels of financial distress since the EU Referendum was in professional services, found research from Begbies Traynor
Two new audit partners have been appointed at the firm BDO in its audit practice following continued growth and investment
Investment in people, tech and businesses impacts on EY's profit per partner figure
If businesses do not take cyber security seriously in their business planning regulators may do it for them, the ICAEW has warned