PracticeAuditCBI backs auditors over criminal charges

CBI backs auditors over criminal charges

Digby Jones supports profession over 'disproportionate' sanctions

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
jail sentence.

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
mistake’.

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.

Related Articles

Is predictive analytics the end of the annual audit?

Audit Is predictive analytics the end of the annual audit?

3h Martin Herron, MHA MacIntyre Hudson
Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

Audit Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

5d Emma Smith, Managing Editor
PCAOB sanctions former Deloitte Turkey CEOs over altered documents

Audit PCAOB sanctions former Deloitte Turkey CEOs over altered documents

1w Alia Shoaib, Reporter
KPMG South Africa to review past audit work amid fresh scandal

Audit KPMG South Africa to review past audit work amid fresh scandal

1m Alia Shoaib, Reporter
FRC introduces £10m sanctions for Big Four firms

Audit FRC introduces £10m sanctions for Big Four firms

1m Alia Shoaib, Reporter
Ukraine’s PrivatBank files $3bn claim against PwC

Audit Ukraine’s PrivatBank files $3bn claim against PwC

2m Alia Shoaib, Reporter
Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

Audit Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

2m Alia Shoaib, Reporter
Big Four dominate FTSE 250 audit market in Q1 rankings

Audit Big Four dominate FTSE 250 audit market in Q1 rankings

3m Alia Shoaib, Reporter