Auditors' Liability - Recent Developments

Article Abstract:

Accountants in the United Kingdom and abroad are growing increasingly more concerned about the widening scope of legal liability in auditing. Several court cases in the United Kingdom are cited concerning negligent preparation of statements where a third party claims to have used them to make a decision. Negligence has been verified by the court, however damages were generally not ordered to be paid due to the fact that direct relation to the decision is not clearly drawn. Concern is expressed over the professional's liability for company errors and negligence. For a plaintiff to succeed, he must prove that he relied on the financial reports prepared by the auditor and that the auditor should have reasonably know of this reliance. A rash of litigation is unlikely to occur, but an auditor should be cautious in the situation where a client is having financial problems. A list of guidelines from the Institute of Chartered Accountants in England and Wales for an auditor to avoid incurring legal liability is included.

United Kingdom, Liability (Law), Legal liability

---

Bridging the Gap

Article Abstract:

In recent years, concern has been increasing over the low level of interest of academics in audit research. On December 19, 1983, the University of Manchester hosted a conference on auditing research. Three papers were presented. One was a survey on the current state of auditing research. The second was concerning supply and demand for auditing research by academics which suggested that firms would prefer their own research. The third paper was on a project interviewing Scottish companies to assess their attitudes toward statutory audit and its costs. This research was presented in clear language, not technical academics form. Much was done to begin building a bridge between practitioners and academics.

Research, Conferences, meetings and seminars, Professional associations, Trade associations, Trade and Professional Associations

---

Materiality in Practice

Article Abstract:

Materiality is regarded as fundamental to both accounting and auditing. A matter should be judged to be material, if knowledge of the matter would be likely to influence the user of the financial statements. It is also material if its non-disclosure, mis-statement or omission would distort the view given by the accounts or other statements under consideration. Efforts are being made to develop quantitative guidelines to aid materiality decisions. These are rejected on the grounds that individual nature of each case requires the exercise of professional judgement to weigh all relevant factors. The accepted materiality must be judged by its impact on the user.

Accounting and auditing, Financial statements

Similar abstracts:

• Abstracts: Personal liability of directors. Inside a legal maze. Westminster update
• Abstracts: R&D intensity and corporate financial policy: some international evidence. Professionalism vs commercialism: the association between non-audit services (NAS) and audit independence
• Abstracts: Director with a history contemplates Ofex. The rebirth of a nation. Are fat cat days numbered?
• Abstracts: Split Thirty's Rile Affiliates and Advertisers. How Top Cable Nets Win Advertisers. Regardless of Size Barter Will Boom
• Abstracts: The Game's Not Over Until It's Over. Musical Chairs. RAB's New Day - 'If It Works, Don't Fix it'

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.