1. Do you believe that the auditor should be legally responsible to users of the financial statements other than shareholders?
2. Should there be any limitation to that liability?

Explain the reasons for your opinions.

2. Summaries the primary tests a Third Party’s claim must pass if they wish to sue a company’s statutory auditors.

3. Compare and contrast an auditor’s liability exposure for statutory audits under section 310 of the Companies Act 1985 with the liability exposure of other professional firms.

Are any differences reasonable and justifiable?

4. Why are the majority of cases against auditors settled out of court? Are there any implications of this?

5. If a firm of auditors wishes to minimize its exposure to legal liability for statutory audits what steps could/should that firm take?

Answer rating: 100% (QA)

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