Thousands of auditors could be forced out of accountancy firms as a concession to the Law Society lifting its ban on multidisciplinary practices this summer.
The claim was made by Stephen Fiamma, chief partner of law firm Jones Day Reavis & Pogue, who last week hosted a round-table meeting with Big Five legal chiefs.
He warned blending accountants and lawyers in one firm would compromise duties of disclosure, particularly in the area of signing off accounts for shareholders, and open them up to massive lawsuits. Statutory audit functions, he argued, should therefore be spun off into separate organisations.
He said: ‘I think every Big Five firm has plans to make the statutory audit independent. It’s a great entree for them, but it’s also one of the biggest liability problems.’
KPMG audit head Ted Awty admitted he could envisage a time when the structure of accountancy firms could change, but said this would not be driven by a need to create separate audit entities.
Arthur Andersen associate law firm Dundas & Wilson chairman Neil Cochran said: ‘I do not think the duties of disclosure for lawyers and auditors are as great as some say. The debate will continue until the rules are made public.’
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