ACCA has slammed a report on auditor liability, which was commissioned by a taskforce of the international accountants’ federation IFAC.
The report, branded as ‘biased and lacking in intellectual rigour’ by ACCA, was prepared by consultancy London Economics. The executive summary of the report said: ‘Excessively severe audit liability should be of concern not just for accountants, but for those concerned about the economy at large. This is because of the adverse effects that severe audit liability can have on the efficiency of capital markets and on corporate governance.’
Mary-Louise Wedderburn, at the technical services department at ACCA, said: ‘None of its arguments is backed up by recent relevant research.’ She said it backs the Big Six which are openly against unlimited liability and the report equates quality only with Big Six firms. ‘It is an apologist charter for the Big Six and could damage the cause for reform,’ she added.
John Gruner, IFAC’s director general, said: ‘If the auditor has to step away as a result of unlimited liability, it is the client that suffers as well.
So ultimately it is not just the auditor but society as a whole that suffers’.
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