PracticeAccounting FirmsAuditor protection draws closer

Auditor protection draws closer

Measures to protect auditors from potentially catastrophic legal claims could be introduced in the companies bill, currently going through parliament, according to reports.

Link: Wyman: ‘Act now to limit auditor liability’

Trade secretary Patricia Hewitt is considering either including them in the current bill or including them in the second companies bill, which is not expected before the next general election, the FT reported.

The FT claims talks between the Department of Trade & Industry and other departments are at an advanced stage.

A source close to the DTI is quoted as saying auditors were likely to be given the right to place limits on their liability with individual companies, subject to the approval of shareholders.

The Big Four have been campaigning long and hard for auditor protection following the disintegration of Andersen following the Enron scandal and other current negligence claims currently going through the courts.

However there is much opposition to the lobby for limited liability, particurlarly from big investor groups and from insurers.

The Association of British Insurers is completely opposed to any cap.

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