PracticeAuditWyman calls for liability cap

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.

Related Articles

Is predictive analytics the end of the annual audit?

Audit Is predictive analytics the end of the annual audit?

4h 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