MPs Attempt To Impose Conflicting Amendments On Audit Bill

by Robin Pilgrim, LawAndTax-News.com, London

22 October 2004

According to AccountingWEB, the UK's Companies (Audit, Investigations and Community Enterprise) Bill has become the subject of a tug-of-war in the House of Commons during its report stage, with MPs proposing sometimes conflicting amendments to the legislation.

The news service revealed that industry spokesman for the Conservative Party, Andrew Mitchell has won the support of the Liberal Democrats for an amendment which would allow auditors in the UK to agree proportionate liability with their clients, provided the contractual agreement is approved by shareholders.

Meanwhile, Labour MP for Newcastle Central, Jim Cousins has attempted considerably strengthen the auditor independence aspects of the Bill, tabling an amendment which states that:

"Any auditor or audit partnership that has sold consultancy and advisory services or tax avoidance schemes requiring registry to a company shall be ineligible to act as an auditor for the financial statements covering the period of the sale."

AccountingWEB also revealed that in opposition to the Conservative-Lib Dem efforts to limit auditors' liability, Mr Cousins is seeking to extend the duty of care required of an auditor to each individual shareholder and employee, and to introduce a duty to detect material fraud.

Recommended