Audit firms dig in for a long haul
Accountants may be better off with slow reform. By Roger Trapp
Wednesday 31 July 1996
Though it may not look that way to them at the moment, all this may be to the accountants' advantage in the long run. By having the issue fully aired and debated, a change to the law - if it comes - will look more like a reasoned response to a business difficulty than a cave-in to a bit of special pleading.
Even accountancy profession insiders now admit that the campaign got off to a bad start - all those claims about the amount of money lawsuits were costing them were never going to get very far so long as the firms would give only scant details about their financial situations. Then there was the breaking of ranks - with KPMG opting to cut its losses by incorporating the audit arm (and announcing full company-style disclosure as a riposte to its critics) and PW and E&Y convincing Jersey of the wisdom of setting up a limited liability status similar to that which protects the Big Six's counterparts in the US state of Delaware. Touche Ross, meanwhile, has apparently sought competitive advantage in allying itself with the old ways and favouring neither of these options.
The Jersey parliament has passed the legislation in principle, and is now having to approve each part of the detail. Apparently, there are elements on the island that have cooled to the idea of big professional firms registering there in order to protect themselves from the calamitous effects of lawsuits, especially if the move is holding up the passage of other legislation such as the abortion bill.
This coolness is matched in certain corners of the mainland. No matter how hard the firms involved have protested that they will not be seeking to benefit from the other advantages that the Channel Islands have to offer, it is proving difficult for the firms involved to convince people that they are not just fleeing to a tax haven. It is believed that unhappiness with "the smell of it" in the City and elsewhere is behind the intervention of the Deputy Prime Minister, Michael Heseltine, after the Law Commission's feasibility study for the Department of Trade and Industry had seemingly left the accountants with little cause for hope.
It might also have something to do with the fact that various City bodies as well as industrial groups have added their voices to the clamour for reform. Last week, the Law Society - while backing the principle of joint and several liability - came out in favour of proportionate liability if both parties agreed to it.
As some senior accountants now accept, the profession should have sought a wider campaign from the start.If it had enlisted the support of other professionals it would not have been open in the same way to accusations of seeking a convenient get-out when those hurt by the spate of late 1980s corporate collapse were seeking people to blame.
Now, according to Roger Hughes, head of audit at PW, the firms are digging in for a long haul. He and his fellow audit chiefs are meeting at regular intervals to keep the campaign going. Last week, two of their number addressed one of the regular meetings of the leading firms' senior partners to tell them of the current position. To judge from the fact that Graham Ward, a PW partner who is chairman of the Institute of Chartered Accountants' professional liability steering group, was also there, it seems that there is also likely to be closer co-operation between the two lobbying efforts.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Shock poll shows voters believe Ukip is to the left of the Tories
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Ukip candidate jokes about 'shooting peasants' in racist and homophobic rant
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Germany sees 'visible rise' in support for far-right extremism in response to perceived 'Islamisation' of the West
iJobs Money & Business
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
£32000 - £35000 per annum + benefits: Ashdown Group: Marketing Services Manage...
£Neg. (DOE) + Excellent Benefits: Guru Careers: A Finance Account Manager with...
Day In a Page
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens