Icas seeks liability guidance

News Article - 24 May 2012
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Guidance on new liability caps are being sought by the Institute of Chartered Accountants of Scotland (Icas).

The caps will be negotiable between business auditors and their customers, with the measure due to come into effect in October 2008.

Principles regarding limited liability agreements are required to be laid out as part of the Companies Act. Icas has since called upon the Financial Reporting Council (FRC) to discuss the measures with investors and those who prepare and audit accounts.

Norman Murray, the institute's president, said: "Icas was pleased to see reform to the auditor liability regime included in the 2006 Companies Act.

"However, there is now a real need for the FRC to produce guidance to assist all the parties who will be affected by this change."

Such guidance would provide useful structures around which auditors of various sizes of companies would be able to establish agreements after negotiating with their clients, he added.

The FRC has recently issued a discussion paper entitled Promoting Audit Quality in which it identified factors surrounding the improvement and preservation of audit quality.

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