Liability risk: the profession's major concern

Article Abstract:

Increases in the incidence of claims and the cost of insurance for accounting firms are not due only to external factors but also to internal factors as well, such as increased competitiveness, tighter deadlines and excessive pressure, with resultingly higher staff turnover and training expenses. To set client fees realistically, accounting firm managers should take into consideration the actual time spent on a project, including overtime. For accountants, a departure from areas of traditional expertise poses its own risk, as do statutory changes and the extension of legal proximity in tort actions by third parties. Sources of claims also include auditors' failure to discover and report employee fraud and audit qualification reports.

Usage, Insurance, Accounting firms, Accounting services, Accountants, Auditors

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Companies Bill reviewed

Article Abstract:

The Companies Bill, which is undergoing passage from the House of Lords to the House of Commons, is designed to implement the European Community's Seventh and Eighth Directives. The Bill addresses the Seventh Directive's requirements by: focusing on consolidation criteria and disclosures; adopting the acquisition method of accounting as normal practice; and granting the Secretary of State disclosure amendment powers. The Eighth Directive provisions are addressed by: stipulating only authorized persons are permitted to perform audits; and developing rules for the creation and monitoring of supervisory bodies.

United Kingdom, Auditing

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