Sir Peter Kemp is quite right regarding the matter of suing for negligence, but for the wrong reason he suggests – namely to prevent the unedifying spectacle of one firm of accountants suing another.
I have no problem with accounting firms being sued if they have not acted to a reasonable professional standard. In fact, I would encourage this because many of us have real doubts about the quality and standards of audits today.
The real reason we should support Sir Peter’s suggestion is that it saves money and is more equitable. When after a corporate collapse the liquidator is trying to recover some funds, seeing the amount lawyers pick up from the corporate carcass is unwholesome and almost obscene.
To see maybe a recovery rate of, say, 60p in the pound fall to say 40p in the pound eaten up by lawyers’ fees is plainly daft.
Thus, having a situation where an accounting and audit professional aware of the real responsibilities of auditors would examine the case makes far more sense.
It should not be supported simply because it conveniently sweeps the matter under the carpet, and indeed there is no reason that such a system as proposed by Sir Peter could not be held in public.
Nick Key Wilson FCA, London
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