Limiting Audit Firms' Liability: A Step in the Right Direction? (Proposals for a New Audit Liability Regime Revisited)

Designing Optimal Regulatory Strategies in a Changing Financial Environment Nova Publications 2016

17 Pages Posted: 22 May 2009 Last revised: 14 Dec 2016

See all articles by Marianne Ojo D Delaney PhD

Marianne Ojo D Delaney PhD

American Accounting Association; Centre for Innovation and Sustainable Development (CISD); Centre for Innovation and Sustainable Development (CISD)

Date Written: May 19, 2009

Abstract

This paper considers the responses of six audit firms, to the four options presented by the European Commission in reforming auditors' liability. Whilst agreeing with a limitation in audit firms' liability, it does not consider the means of limitation, as provided by the European Commission in its Recommendation, to be the best means of limiting auditors' liability. In proposing a means whereby not only a limitation of audit firms' liability can be achieved, but also one which would serve as a better means of facilitating harmonisation, the paper makes reference to the variants presented in the author's paper "Proposals For a New Audit Liability Regime", namely a combination of the first and third options. Further, the wide scope permitted by the Commission in leaving it to Member States to decide upon the appropriate method for limiting liability and the means of limiting liability, as the paper will seek to illustrate, do not present the best opportunities in realising the goal of harmonisation.

Suggested Citation

Ojo D Delaney PhD, Marianne, Limiting Audit Firms' Liability: A Step in the Right Direction? (Proposals for a New Audit Liability Regime Revisited) (May 19, 2009). Designing Optimal Regulatory Strategies in a Changing Financial Environment Nova Publications 2016, Available at SSRN: https://ssrn.com/abstract=1407208 or http://dx.doi.org/10.2139/ssrn.1407208

Marianne Ojo D Delaney PhD (Contact Author)

American Accounting Association ( email )

5717 Bessie Drive
Sarasota, FL 34233-2399
United States

Centre for Innovation and Sustainable Development (CISD) ( email )

United States

Centre for Innovation and Sustainable Development (CISD) ( email )

United States

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