Deloitte responds to European Commission audit liability recommendations |
New York – Deloitte Touche Tohmatsu commends the European Commission (EC) for its intensive consideration of the complex issue of limiting civil liability for statutory auditors and audit firms. According to the Commission’s statement, the recommendation aims to encourage new entrants into the audit market and to protect European capital markets by ensuring that audit firms remain viable in an environment where there is an increasing trend towards litigation and a lack of sufficient insurance cover in the sector.
This recommendation also proposes principles to be followed by member states when adopting the recommendation, including limitations not applying in the case of intentional misconduct on the part of the auditor and a right to fair compensation by damages parties.
Deloitte believes the European Commission gave very careful consideration to issuing this recommendation, and it will help achieve the Commission’s goals and objectives.
Related links
- European Commission press release
- European Commission recommendation
- Oxera report: Ownership rules of audit firms and their consequences for audit market concentration
- London Economics: Study on the economic impact of auditors’ liability regimes
- London Economics: Report summary
- Charlie McCreevy presents statutory audit package; JURI Committee, European Parliament
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Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.