Accountants welcome McCreevy remarks on auditor liability

The Institute of Chartered Accountants in Ireland has welcomed the remarks made by commissioner McCreevy that the success of capital markets was dependant on there being a competitive and stable audit market.

Mr McCreevy was speaking at a FEE (the European accountants’ organisation) conference on audit regulation.

The conference was attended by representatives of the European Commission, European audit regulators and the Public Company Accounting Oversight Board as well as the profession itself.

He recognised too that in the contemporary litigious environment that the insurance and capitalisation available to the largest audit network would be insufficient to protect that network against all threats and correspondingly a threat to capital markets themselves.

Commenting on the commissioner’s remarks, ICAI director of technical policy, Aidan Lambe said: “We welcome the recognition by the commissioner of what are now the facts of life in the audit market and ICAI looks forward to his report and the commission consultation process at the end of the year.

"We welcome particularly that the commissioner recognises that changes in the audit liability regime can contribute to the stability of capital markets.

The commissioner’s remarks too that international regulators and supervisors need to cooperate more closely against the backdrop of an increasingly global economic environment and global auditing networks are also welcome.

Often an undue regulatory burden derives not from the intent of an individual regulator but from the simple inconsistencies involved in the work of multiple regulators.”