OFT asked to correct liability cap report
Corrections to apparent inaccuracies in the Office of Fair Trading's report on auditor liability have been requested by the ICAEW.
Link: Liability cap special report
The institute’s chief executive Eric Anstee wrote to the OFT’s executive director Penny Boys disputing the findings of the report.
In particular the assertion that professional indemnity insurance capacity and premiums are expected to improve in the medium term ‘does not square with what our member firms are being told by insurers’, Anstee wrote.
Anstee also argued that evidence from mid-tier firms had been ignored, with many wanting to compete against the big four for audit work, but were reluctant to do so because of the potential exposure and unavailability of insurance.
In addition Anstee said that the report ‘addressed a fundamentally different question’ to the one that had been asked, namely whether a cap would be pro-competitive rather than whether it would maintain the current level of competition.
The OFT has previously said that anyone disagreeing with the reports findings should make their case to the DTI.