Saturday, February 02, 2008

Auditors fear legal attacks in plans to 'simplify' reports


Fears rise of more law suits as third party liability clauses come under review by the APB

Auditors could be left open to legal action from all sides in the event of a major audit failure, under plans to review the auditor’s report.

The Auditing Practices Board is looking again at so-called ‘third party’ liability clauses in the audit report, and considering proposals to remove a crucial defence against litigation.

The ‘Bannerman’ statement, which auditors use to discourage third parties from relying on the audit, and so pursuing legal claims, has been flagged by the APB for reconsideration as part of a broader review of the auditor’s report.

See full Article.