The FT reports that auditor PwC has changed the wording it uses to sign-off accounts in order to limit its liability in the event that banks lend money and claim that they relied on the figures when agreeing to provide funding.
The change in the wording was thought necessary after a Scottish law case ruling appears to give banks the right to sue auditors of bankrupt companies in order to recover bad debts. A spokesman for PwC said: 'The legal advise we have received is clear that we have to include a disclaimer, otherwise accountants could effectively be underwriting the bad lending decisions of banks'.
The new wording, which will appear when PwC formally signs off corporate accounts, will say: 'We do not, in giving this opinion, accept or assume responsibility for any other purpose to any other person to whom this report is shown or in whose hands it may come save where expressly agreed by our prior consent in writing'.
The disclaimer, which will no doubt also be adopted in some guise by other accounting firms, will do nothing to redeem the audit profession in the eyes of the public. One wonders what use an auditor is if the firm will not even stand behind the accuracy of its own figures.