THE Government has been asked to change the law on the liability of auditors. Unless it is changed, companies, investment and the economy will suffer, Mr Niall Deasy, president of the Institute of Chartered Accountants in Ireland, has warned.

Speaking to the institute's mid western society in Limerick, he said the changes are needed to bring fairness and equity on professional liability, particularly for auditors.

"Too often members of the accountancy profession are sued for damages which are the responsibility of others", he complained. "This is because accountants are believed to carry significant professional indemnity insurance and because of the application of the principle of joint and several liability".

Mr Deasy noted that proportionate liability, incorporation and limitation of liability by private contract are all impossible under Irish legislation. "When things go wrong", he argued, the auditor is frequently seen as the prime object of the suit "and can be sued for the total amount of alleged damages. This is because they are not required to have insurance cover", he added.