ICAS’s response comes soon after Hewitt ruled out introducing an audit cap into the Companies Bill.
ICAS president, Ian Robertson, stated: ‘We were disappointed at the government’s ill-informed decision not to proceed with a liability cap for auditors. However, we welcome Patricia Hewitt’s announcement that the government is willing to consider the introduction of a proportionate liability regime for auditors.’
He added: ‘Given the low number of participants in the global audit market we are concerned that any further reduction would have severe consequences for financial reporting and the UK (and global) economy.
‘We would like to see a more realistic environment for auditors where the penalties on auditors for making a mistake are not so far reaching and disproportionate. This should reinforce the confidence of audit firms to maintain and expand services in the global audit market and would hopefully encourage new entrants to the market. In our view, the introduction of a proportionate liability regime for auditors is the most effective and fairest long term answer.’
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