Press Digest: Auditors seek to cap liability in negligence cases

A week after big-four accountant Deloitte was hit with a £14 million (€16.7 million) fine in the UK, the Sunday Times reports that Irish auditors are looking to cap their liability in negligence cases.

Accountants currently face unlimited liability over audits and, after the Deloitte case, the paper reports that there are fears that this could bankrupt firms.

The fine on Deloitte was 10 times higher than the previous record – a £1.4 million fine for PricewaterhouseCoopers (PwC) in 2012, as the UK lifted its cap on fines for accountancy firms in such cases.

The Consultative Committee of Accountancy Bodies (Ireland) – the umbrella group for the industry here – says the auditor-liability regime poses a "significant threat" to the provision of statutory audits to publicly listed companies.

It warns that to avoid a "catastrophic loss", reform is needed, although it concedes that auditor-liability reform might not be "politically popular" in the current climate. PwC is currently being sued by former client the Quinn Group and Ernst & Young is also facing legal action over its audit of Anglo Irish Bank.

Further excerpts from the Anglo tapes appear in the Sunday Independent after a hiatus of several weeks. The paper reports that Merrill Lynch banker Matt Pass told Anglo's head of treasury John Bowe that he felt quite guilty about the conduct of the banking industry and that it had let the world down.

Merrill Lynch advised the State on the bank guarantee and Mr Pass allegedly said information it had handed to politicians meant officeholders such as Brian Cowen and Gordon Brown would lose their jobs.

In a separate recording, Matt Moran, Anglo's chief financial officer who, it emerged recently, has secured immunity from prosecution, told Mr Bowe money was pouring out of the State in late September 2008. He cited a senior stockbroker source, alleging that significant money was leaving AIB and Bank of Ireland and going into German bunds, with the two bankers speculating that Ireland's "super-high net worth" individuals had shifted as much as €500 million to Germany in just two days.

Budget speculation grabbed the headlines in the Sunday Business Post in a report that the Government was considering a British-style cap on social welfare benefits in an effort to encourage people back to work.

The paper said it had been confirmed over the weekend that officials at both the Department of Social Protection and the Taoiseach’s office were examining options to remove disincentives to work,

A cap along UK lines would mean that a couple or a lone parent could not receive more than €26,000 in welfare benefits – about €500 a week, which is the average earning in Britain, the paper said.

However, it added that the figure for average earnings in Ireland would be higher – at about €32,000 – and that this would not include child benefit, which is a universal payment.