RegulationAccounting StandardsReforms of directors’ liability welcomed by CIMA

Reforms of directors’ liability welcomed by CIMA

Institute says reforms are silver lining on abandoned OFR

The proposed new clause of the Company Law Reform Bill, laid before
parliament on 3 May, which limits directors’ liability to statements made in bad
faith or recklessly has been welcomed by the Chartered Institute of Management
Accountants.

CIMA chief executive Charles Tilley said the proposal was ‘the silver lining
in the decision to abolish the statutory operating and financial review’ as it
provided the opportunity to revisit the issue of director’s liability for
forward-looking statements. 
‘Individually, and collectively with other concerned bodies, CIMA has made its
concerns known to the Department for Trade and Industry, asking that UK company
law be amended so that directors should not be penalised for statements made in
good faith which are not reckless,’ Tilly commented.

The new clause states that a director is only liable for misleading or
dishonest statements, and includes their responsibility to consider whether
information is misleading or dishonest. 

CIMA was one of the signatories of a letter to the DTI in March 2006, calling
for greater protection for statements made in good faith, to enable transparent,
meaningful reporting.

Related Articles

Demystifying GDPR for accountants

Accounting Standards Demystifying GDPR for accountants

6d Ellen Temperton, Lewis Silkin
EY fined £1.8m over Tech Data audit

Accounting Standards EY fined £1.8m over Tech Data audit

2m Emma Smith, Managing Editor
The great professional services shake-up

Accounting Standards The great professional services shake-up

3m Fergus Payne, Lewis Silkin
What do clients actually want from an accountant?

Accounting Standards What do clients actually want from an accountant?

4m Emma Smith, Managing Editor
Accountants shouldn’t neglect hybrid mismatch anti-avoidance rules

Accounting Standards Accountants shouldn’t neglect hybrid mismatch anti-avoidance rules

4m Alison Conley
Membership of the accountancy profession on the rise

Accounting Standards Membership of the accountancy profession on the rise

5m Alia Shoaib, Reporter
The real price of mates' rates in the provision of professional services

Accounting Standards The real price of mates' rates in the provision of professional services

5m DAC Beachcroft
IASB overhauls insurance accounting with issuance of IFRS 17

Accounting Standards IASB overhauls insurance accounting with issuance of IFRS 17

7m Alia Shoaib, Reporter