Glascow (Aug. 19, 2004) -- In response to an unfavorable government-sponsored report on capping auditor liability, the Institute of Chartered Accountants of Scotland appealed for a more detailed and impartial review of a paper issued by the Office of Fair Trading.
In a letter to the Secretary of State for Trade and Industry, the accounting group railed against the OFT’s finding not to introduce “a capping mechanism.”
"We are disappointed to note that the many of the conclusions reached by the OFT appear to have been based on assumptions which are not wholly supported by fact,” said Ian Robertson, president of the 15,000-member body. "We firmly believe that the OFT has failed to assess fully the potential anti-competitive implications.”
The OFT -- an independent agency -- recently compiled a report which concluding that there was no market need for any form of liability limitation for auditors in the U.K. As a result, the Big Four firms and the Institute of Chartered Accountants in England and Wales have a very short time to persuade the government to introduce any changes in liability limitation in the U.K. audit market.
The firms and the Institute of Chartered Accountants said that one option would be the repeal of rule s322, which presently prohibits auditors from agreeing with clients a pre-arranged limit on any liability.
-- WebCPA staff
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