US companies disclosing auditor agreements
Ninety companies disclosing liability agreements
Since the start of 2006 more than 90 US companies have disclosed liability
agreements with their auditors, a massive jump on the handful that did so last
These agreements limit the companies’ ability to hold outside auditing firms
responsible for any problems with the accounts they sign off on.
The majority of the 90 companies are the clients of Big Four firms Ernst
& Young and KPMG, according to The Wall Street Journal.
Most of the provisions rule out a company seeking punitive damages from their
auditor, or require that any accounting disagreement travel through arbitration
or mediation, not the courts.
They do not, however, limit the rights of third parties, such as
shareholders, to sue an auditor