EU suggests legal shield for big audit firms - report |
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Thu, 18 Jan 2007 09:27
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BRUSSELS (AFX) - The big four audit firms should enjoy legal protection against potentially ruinous damages claims, according to a European Commission policy paper to be be published today, the Financial Times reported.The paper sets out how the commission intends to shield groups such as KPMG, Ernst & Young, PwC and Deloitte from lawsuits launched by disgruntled investors, the paper said.The FT said the move reflects widespread concern that litigation may trigger the collapse of another big audit firm, following the meltdown of Arthur Andersen in the wake of the Enron scandal in 2002.The commission paper outlines four options for improving protection for the audit industry.It could try to impose a fixed monetary cap for auditor liability at the European level through EU legislation; introduce a cap based on the market capitalisation of the audited company; or propose a cap based on a multiple of the audit fees charged by the auditor to the client.The commission paper will go to EU member states, regulators and the private sector for consultation.victoria.main@afxnews.comvm/vlbCOPYRIGHTCopyright AFX News Limited 2006. All rights reserved.The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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