Liability: case law accumulates
Article Abstract:
A 1992 case, Berg Sons and Company Ltd and others versus Mervyn Hampton Adams and others, was used to illustrate the extent of the liability of auditors. According to the complaint of the plaintiffs, the accountants' failure to qualify their audit report for 1982 enabled Berg Sons to continue trading in commodities until 1985. Union Discount, the co-complainant, claimed that they used the 1982 account as basis for discounting bills of exchange drawn by Berg in late 1983 and early 1984. In deciding the case, the presiding judge concluded that Union Discount erroneously relied on the 1982 account since the usefulness of the report had already expired at the time that it was consulted on. Another case-related issue was debtor recoverability. It was decided that unsupported representation of the financial positions of the debtor Gimco is not considered as audit evidence.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1992
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Disclosure: a duty or a right?
Article Abstract:
Guidelines are provided for accountants whose clients or employers may be involved in drug dealing, terrorism, or treason. Under the UK's Prevention of Terrorism Act of 1984, anyone who has information which might help prevent an act of terrorism or capture those responsible for an act of terrorism has a duty to report that information to the authorities. Anyone who fails to disclose such information is guilty of a criminal offense. In the case of drug trafficking, the offense is not in concealing knowledge of an offense but in being concerned in the arrangement of a drug trafficking transaction. Disclosing a suspicion to the authorities that a client's funds are derived from drug trafficking is not a breach of contract under British law. Disclosure of terrorism is an obligation; in the case of drug trafficking, it is a right.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1988
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Grappling with the PII problem
Article Abstract:
The problem of Professional Indemnity Insurance (PII) has reached crisis proportions in the UK. An increasingly litigious commercial environment, coupled with a long-term shortage of capacity in the PII market, has resulted in accountants paying higher premiums for less coverage. The Institutes of Chartered Accountants in the UK have asked the government to consider five options for dealing with the problem: incorporation with limited liability, compulsory insurance, changing the 'joint and several' basis for tort awards to a several basis only, placing a statutory ceiling on liability, and-or limiting liability in tort. The government has not yet acted on these proposals.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1987
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