Accountants Liability Update

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Accountants Liability Update

In this edition of our Accountants' Liability Update we

look ahead a few months to April 2008 when auditors will be

allowed to limit their potential liability to audit clients and

we consider the affect of this for auditors, third parties and

professional indemnity insurers as well as whether these newly

implemented Companies Act provisions will satisfy any future EU

proposals. In a bid to promote greater transparency, we

highlight that the ICAEW will now be holding most of their

disciplinary hearings in public and we also consider the recent

Market Participants Group Final Report on Audit Choice.

Finally, we look at two recent decisions concerning

auditors' liability.

Taking A Gaze At LLAs

As from 6 April 2008 auditors will be allowed to reach

"Liability Limitation Agreements" (LLAs) limiting the

amount of their liability to their audit clients.

For reasons outlined here this should be of particular

interest to those involved in claims against auditors,

including their professional indemnity insurers and their

co-defendants. As also explained, there may be circumstances

where an auditor's liability is in effect unlimited despite

t...

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