The Hundred Group of Finance Directors has for the first time thrown its weight behind demands for a cap on auditor liability to be included in the companies bill currently making its way through parliament.
News that the influential group has publicly announced its support for the profession will be a major boost to Peter Wyman, former president of the ICAEW, in his efforts to gain further protection for auditors.
Jonathan Symonds, chief financial officer at AstraZeneca and spokesman for FDs of the hundred biggest companies on the London Stock Exchange, said: ‘Number one, we are supportive of it: I think there is a broad consensus between the profession and ourselves. To risk the demise of another major accounting firm would be a disaster. Many of us find four is too few.’
Symonds went on to say that ‘the issue has to be dealt with now’ and if there is clarity and consensus from the current consultation on the issue, then there is ‘no reason why it shouldn’t pass into legislation’.
But he did warn that if the audit profession receives protection, the decision would have to be accompanied by ‘a full transparency of financial performance and exposure’.
The news will come as a blow to institutional shareholders. Last month, Iain Richards, head of governance at Morley, accused the profession of trying to ‘railroad the debate’.
But Symonds was sensitive to the concerns of investors saying that ‘you can see why people will object to narrowing the liability of a group that investors probably rely on the most’.
Consultation on a liability cap launched by the department of trade closes on 12 March.
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