Many FDs back audit cap for firms
This week's Accountancy Age/Reed Accountancy Personnel Big Question shows that many finance directors have given cautious backing to the Big Four's quest to get a cap on liabilities for audit.
Link: Audit cap boost for Big Four firms
The results show nearly half wouldn’t be opposed to a cap, while just over two in five respondents are.
Geoff Chiverton, financial director at European Oat Millers, said: ‘There have been many attitudes in the past where auditors have been used as a scapegoat for management failings.’
Another sympathetic FD said: ‘Auditors are sued, not because they are immediately recognised as having performed badly, but usually because they are perceived as having the deepest pockets. This then comes back on other businesses through increased audit fees and insurance premiums. There has to be some protection for the audit firms.’
But others strongly disagreed with this stance: ‘In our professional and private lives we can all potentially be sued for wrongdoing. We cannot get a blanket cap on the limit so why would auditors?’
Another FD agreed: ‘If the auditors are found to be fundamentally at fault there must be no limit. They are paid to fulfil a role. And if they fail in that role then the ultimate price must be a fatal one.’