What the Institute didn't tell you
Article Abstract:
The Institute of Chartered Accountants in England and Wales provides guidance to members on limiting awards of damages arising from malpractice suits in the revised statement 'Managing the Professional Liability of Accountants.' What the Institute failed to include in this document is guidance on how its members can avoid audit negligence claims in the first place. The paper defines negligence as the failure of practicing accountants and auditors to demonstrate 'reasonable skill and care which is reasonably to be expected in the circumstances of the case.' The key to avoiding negligence claims, therefore, is a good understanding of the terms 'reasonable skill' and 'circumstances of the case.' The former refers to the skill possessed by the ordinary skilled auditor, while the latter pertains to factors that affect the probability and gravity of error in the accounts and the existence of measures to prevent the mistake.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1995
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Practical proposals
Article Abstract:
The Institute of Chartered Accountants in England and Wales is set to adopt a new system for the issuance and renewal of practicing certificates in 1998. The more flexible process replaces an old system which awards certificates only to individuals who have previously fulfilled two years' worth of experience in public practice with a recognized training organization. The new system recognizes the recency and relevance of the professional experience, requiring post-qualifying members to finish two-years work experience during the four-year period before the application. The experience can be in business or practice. The new system also aims to treat all members fairly and to simplify the process.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1997
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