Call for brave auditors

Press, 19 February 1986, Page 39

Call for brave auditors

By Simon Louisson, in Wellington Auditors have to be courageous to qualify accounts when they see the need, the president of the New Zealand Society of Accountants, Mr Gary Lloyd, told the-Wellington branch Mr Lloyd, managing director of McDonald’s, said there is going to be tremendous pressure on the auditing profession in the next few years. “Because of the complexities of business they’re going to be forced to qualify accounts more and more. It’s vital they have courage and support from their colleagues to do this,” he said. Accounting firms must also stand together and refuse to take on a client from another firm who objects to a qualification. Mr Lloyd called for the limiting of liability for auditors.' A significant company could collapse and the auditors then be sued.

World-wide, there were more than S2B in law suits outstanding against accounting firms but their combined capital was only SSOOM. Personal risk involved made it more difficult to attract the right brains to the profession. He suggested proportional liability may be more appropriate than the current “anachronistic” unlimited liability. Mr Lloyd said it was significant in the Securitibank case (one of this country’s major commercial collapses) that the liquidators settled with the auditors out of court for a substantial sum before sueing the directors.