The profession was hoping for the inclusion of legislation on a proportional liability cap for auditors, but last week’s Queen’s speech made no mention of such proposals. The ICAEW is hoping for a reprieve from ministers, who have been reluctant to include legislation in the first part of the bill.
Despite signs from the DTI that the profession will have to wait, a public consultation could see a last-minute change. The consultation will start by Christmas. ‘Ministers are not convinced of the need to use this piece of legislation to address the issue of auditor liability,’ said a DTI spokeswoman. ‘The process of consultation does allow for its inclusion in the first bill if this opinion changes.’
An ICAEW spokesman said it was still trying to persuade ministers to include liability legislation in the first bill, but would take part in a consultation even if this aim was not achieved.
The companies bill includes a raft of proposals aimed at tightening regulation around the auditing profession. It would increase an auditor’s powers to obtain information from directors and employees, require directors to state that they have not withheld any relevant information from auditors, make companies publish full details on the non-audit services they have bought from auditors and increase the Financial Reporting Review Panel’s enforcement powers.
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