ACCA hails Government move on auditor liability
The Association of Chartered Certified Accountants (ACCA) has today welcomed the move by Minister for Trade and Commerce Michael Ahern to refer the issue of auditor liability to the Company Law Review Group.
The ACCA explained that “joint and several liability” means that an auditor could potentially be held personally responsible for losses caused by the actions of others, even the actions of a director of an audit client company.
An auditor who is 1% responsible for a loss could still have to make good all 100%, if the persons who were the main cause of the loss are unable to meet their 99% share.
Roger Acton, head of ACCA Ireland said: “Although directors and auditors owe duties of skill and care and should rightly be held accountable for their work, financial liability should be directly linked to the responsibility for any economic loss caused, as it is rare for only one party to be at fault.
“A move towards proportionate liability would simplify the existing law on liability and mean that, where more than one party was responsible for loss caused to a claimant, no single party could be held responsible for meeting the whole of the claim.
“It is wrong that while many parties play a key role in the finance process, they can then back away whenever crisis hits, and leave the auditors to take the whole blame and risk.
“We must find a solution which is more equitable and properly shares responsibility.”
