Competition report: Liability reform needed
ICAS argues proportionate liability 'essential' to avoid catastrophe
Scottish institute ICAS has concluded that the DTI report into competition in
the audit market highlights the need for auditors to be able to limit their
liability.
The body said the report demonstrates that the loss of another Big Four firm
would have ‘catastrophic consequences for capital markets’.
‘Only one company from the FTSE 100 has a non-Big Four auditor,’ said James
Barbour, director of accounting and auditing at ICAS. ‘This concentrates a great
deal of large plc audit work in the hands of the Big Four – work which is vital
to the smooth function of the capital markets. The need for the introduction of
a system of proportionate liability, as envisaged in the Company Law Reform
Bill, is therefore essential in an attempt to ensure that at the very least the
current level of competition is maintained.’