EC recommendation on limiting auditor liability
13 Jun 2008
The European Commission has issued a recommendation to limit civil liability for auditors and audit firms carrying out a statutory audit of the consolidated annual accounts of a European company whose securities are admitted to trading on a regulated market in a Member State.
Deloitte responds to European Commission audit liability recommendations: 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. |
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- Full Test of Recommendation (PDF 19k)
- Impact Assessment - Full Text (PDF 554k)
- Impact Assessment - Executive Summary (PDF 38k)