U.K. Resists Request to Cap Liability, a Blow to the Big Four Firms

In a blow to the Big Four accounting firms, the United Kingdom's Office of Fair Trading rebuffed the firms' claim that a litigation cap would boost competition, the Financial Times reported on its website.

The firms had campaigned to limit their liability but the U.K. office said a cap would be "competitively neutral overall,” the FT reported.

The firms were disappointed earlier this month when the office delayed action on their attempt to cap their liability when a company implodes on their watch.

The Big Four accounting firms Deloitte Touche Tohmatsu, Ernst & Young LLP, KPMG LLP and Pricewaterhouse Coopers LLP, argued that one or more of them could be destroyed by litigation, the Wall Street Journal reported.

U.K. accounting firms have been trying for nearly a decade to get liability protection and accounting firms across the European Union had been closely watching the U.K.'s action hoping it would begin a trend across Europe.

The meltdown of companies such as Enron in the U.S. and Parmalat SpA in Italy have caused accounting firms to seek protection against rising litigation risks and the difficulty and cost of insuring against such potential damage claims, the Journal reported earlier this month.

You may like these other stories...

Here's a CPA who truly walks the walk. On March 15, Frank Ryan, CPA, departed San Diego, California, with plans to be in Ocean City, Maryland, by July 2 to teach a course at the Maryland Association of CPAs’ (MACPA...
When Theodore J. Flynn first joined the Massachusetts Society of CPAs (MSCPA) in 1970, it was a different world and a different profession.  The "Big Eight" were still headquartered in Boston. Vietnam War...
Accountant Rickey Charles Goodrich had it a little too good. Many bean counters would kill to serve as financial guru to the likes of Pearl Jam. Goodrich was hired in 2005, and the following year, he became the CFO of Curtis...

Upcoming CPE Webinars

Jul 23
We can’t deny a great divide exists between the expectations and workplace needs of Baby Boomers and Millennials. To create thriving organizational performance, we need to shift the way in which we groom future leaders.
Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.
Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.