Wyman calls for liability cap
The government should limit auditors' liability in return for more responsibility, according to Peter Wyman, president of the ICAEW.
Link: Firms may win £200m liability cap this year
His call comes after Accountancy Age revealed this week that the Department of Trade & Industry already has ‘detailed proposals’ due for consultation, possibly before the summer.
Peter Wyman ideally wants to see ‘joint and several’ liability exchanged for a ‘proportional’ form, but failing that he is urging government to introduce an overall ceiling on the amount an auditor may be held liable for.
Speaking today in Nottingham Wyman will say: ‘Let me make it clear, I am not suggesting auditors should be able to walk away unharmed. They must have a proper responsibility for their own actions. Nor am I suggesting this reform should come free. I would expect a reasonable extension of both the areas within a company’s annual report over which auditors should accept responsibility and that auditors should accept a duty of care to a wider group of people than under the current law.
‘Without a change in auditor liability, we may find fewer firms than ever willing or able to audit large companies and this is not in the interests of our capital markets or of those that invest in them. Ultimately this is not in the interests of the British economy as a whole.’
Last week trade secretary Patricia Hewitt got the work underway on a cap at the DTI. ‘The government is considering proposals on auditor liability in the company law review and will consult on its own detailed proposals in due course,’ her statement said.