本文是accounting essay范例，题目是“EU Commission on Auditor Liabilities（欧盟审计责任委员会）”，审计师们越来越多地发现，他们正成为一些人的目标，这些人觉得自己在财务账目质量方面受到了冤枉。审计师须考虑公司编制的财务帐目，并确定他们是否相信这些帐目真实、公正地反映了公司的基本财务状况。用“正确”来判断交易是否真的发生，用“公平”来判断交易的价值是否被准确记录。
Auditors are increasingly finding that they are being targeted by those who feel that they have been wronged by the quality of the financial accounts. Auditors are required to consider the financial accounts that are prepared by the company and to establish whether they believe that they give a true and fair representation of the underlying financial position. By ‘true’ they are looking for whether the transaction actually occurred and by ‘fair’ they are looking to ascertain whether the value of the transaction has been accurately recorded.
In the UK, there is a rule that liability for misstatement is joint and several between wrongdoers. This often results in auditors taking a much greater portion of the liability than would seem just. Auditors are often seen to have deep pockets due to their insurance policies and, as such, make more promising targets for those who believe that they have lost out financially due to the inaccuracy of the accounts[1].
Background to the EU Consultation on Auditor Liability欧盟审计责任咨询的背景
There have been widespread concerns over this practice, with many countries operating a more proportional approach where the extent of the blame dictates the extent of the liability. The European Union has shown particular concern over the potential reduction in competition that this lack of capped liability leads to. With the limit level of professional insurance policies playing a huge role in the company’s decision as to which auditor to appoint, this is thought to favour the larger auditors and exclude the smaller players from some of the larger lucrative contracts. It is also thought that this requirement presents such a great barrier to entry for auditor firms that there is a real danger that the audit market is not operating competitively.
人们对这种做法普遍感到关切，因为许多国家采取了一种更相称的办法，在这种办法中，责任的程度决定责任的程度。欧洲联盟对这种不设上限的责任可能导致竞争减少表示了特别关切。由于专业保险政策的限制水平在该公司决定任命哪家审计机构时发挥了巨大作用，人们认为，这有利于较大的审计机构，而将较小的公司排除在一些利润丰厚的较大合同之外。人们还认为，这一要求对审计公司的进入构成了巨大的障碍，从而存在着审计市场缺乏竞争力的真正危险。
The EU consultation undertook a study based on four possible options that were available to produce a cap for auditor liability. Firstly, they considered a monetary cap on a Europe wide basis. Secondly, they considered a monetary cap based on the size of the auditor firm. Thirdly, there was an option to produce a monetary cap based on a multiple of the audit fee and finally, they considered the option of member states entering into a policy of proportionate liability, which would require the courts to split the liability based on the level of responsibility for the breach and on a proportional basis. This could either be achieved through statutory provisions or through the contractual provision between the company and the auditor.
Upon consultation, the commissioners found that there was overwhelming support for the concept of having a cap on auditor liability, both from inside and outside the auditing profession. The Commission noted that the issue of auditor liability was not a new one, with consideration having been given, in 2001, to whether the extent of the differences between the countries in relation to auditor liability would prevent a single market across Europe. Although, at this stage, the substantial differences across jurisdictions were recognised, they were not thought to be so large that anything had to be done to rectify the position. However, since 2002, the large scale collapse of Arthur Andersen has occurred, bringing the issue of potential liability caps back into the forefront.
The Commission initially identified the potential problems that the current auditing regime causes in terms of market stability and competition within the auditing function. Considerable attention was paid to the issue of public interest and the need to have a stable auditing function which can be relied upon to be accurate. For an auditing function to be efficient, the company must be able to select an appropriate auditor for its business needs but still allow it to maintain the independence of the function so that the stakeholders can rely on the statements. It is accepted that auditors will not always be 100% accurate; however, they should be able to be relied upon as this is critical to the overall efficiency of the European capital markets.
Concentration of the Audit Market审计市场的集中
The central importance of the auditing profession is not disputed, with investors relying on the financial statements in order to make investment decisions. However, the magnitude of the risk that auditors are exposed to is becoming increasingly worrying both for the auditors and for the general competitive landscape. Due to the nature of internationally listed companies, there are only four companies that are capable of providing the necessary auditing services. These are refereed to as the ‘Big Four’: Deloitte, KPMG, Price Waterhouse Coopers and Ernst & Young. It is not necessarily the expertise that prevents others entering the market, but rather the high level of professional indemnity that is required which is simply not cost effective for smaller firms entering the market. It is recognised that there is little or no chance of a new entrant into the market, yet there is a danger that any one of the four could be forced out of the market, at any point, thus further reducing the competition in large scale auditing. In reality, international auditing firms are not actually one large firm but are a network of smaller firms that recognise they are not able to manage the level of risk that is required for international auditing. With strict rules relating to auditing firms, it is unlikely that another network will emerge, making the international audit market particularly fragile[2].
由于投资者依靠财务报表来做出投资决策，审计行业的核心重要性是毋庸置疑的。但是，审计员所面临的风险之大，对于审计员和整个竞争环境来说，正变得越来越令人担忧。由于国际上市公司的性质，只有四家公司有能力提供所需的审计服务。它们被称为“四大”:德勤(Deloitte)、毕马威(KPMG)、普华永道(Price Waterhouse Coopers)和安永(Ernst & Young)。阻止其他公司进入市场的不一定是专业知识，而是需要高水平的专业赔偿，这对进入市场的小公司来说根本不划算。人们认识到，新进入者进入市场的机会很少，甚至根本没有，但存在一种危险，即四家公司中的任何一家可能在任何时候被挤出市场，从而进一步减少大规模审计领域的竞争。事实上，国际审计公司实际上并不是一家大公司，而是一个由小公司组成的网络，这些小公司认识到，它们无法管理国际审计所需的风险水平。由于与审计公司相关的严格规定，不太可能出现另一个网络，这使得国际审计市场尤其脆弱。
Auditors often become the target in cases of insolvency as they are the ones with the resources available to deal with any financial losses due to misstatement. It is this potential redress that offers investors a degree of confidence in the market and, therefore, it is seen as desirable that auditors are held to be liable in situations where they get it wrong. However, it is recognised that the current joint and several approach is simply inefficient and consideration should be given to alternatives.
For the auditing profession to be truly efficient, it is necessary for there to be a substantial degree of choice. This is not currently the case and effort should be made to ensure that the auditing options are widened so as to become accessible to other medium sized firms. One of the recognised ways of doing this is to have a liability cap or a proportionate regime so that the deep pocket syndrome does not restrict the choice of auditor to the hands of the big four[3].
Extent of Risk for an Auditor审计师的风险程度
The major barriers for mid sized auditor firms are recognised as being the lack of available indemnity insurance and the large amount of potential risk that is involved when auditing large international firms. Clearly, an auditor has a duty towards the company itself, based on either contract or tort when it has behaved negligently or with wilful misconduct. The vast majority of cases are related to negligence and it is this area of liability that has generated the most interest from the European Commission[4].
中等规模的审计公司的主要障碍被认为是缺乏可用的赔偿保险和审计大型国际公司时涉及的大量潜在风险。显然，审计师对公司本身有义务，无论是基于合同还是侵权行为，当公司存在过失或故意不当行为时。绝大多数案件都与过失有关，而正是这一责任领域引起了欧盟委员会(European Commission)的极大兴趣。
Liability is clearly owed to the client itself; however, this has also extended to be liability towards third parties, causing further barriers to entry for mid sized auditing firms. For a third party to bring a claim, it is necessary for there to be a causation link between the act of negligence and the damages suffered by the third party which, although difficult to prove, has resulted in some high profile payouts further jeopardising the chances of mid tier firms entering the international auditing market[5].
At the heart of this widespread liability is the concept of joint and several liability. Under this process, a third party who has a claim against a director can also bring a claim against an auditor who has given an unqualified opinion as to the accuracy of the accounts. In a case of corporate insolvency, the directors rarely have any finances available to pay out third party losses, therefore, encouraging actions against the auditors who are seen to have ample financial backing. It is this high level of risk that the cap on liability is aiming to address.
Oppositions to an Auditors’ Liability Cap
Despite the overall acceptance of the need to do something to alter the balance of power within the international auditing market, one of the main objections was that placing a limit on liability would give the auditing profession a privileged position in comparison to other professions. A main aim of establishing a cap was to encourage mid sized firms to enter into the market and it is feared that a liability simply would not achieve this aim. Much of the exposure faced is outside of the EU (i.e. in the US)[6] and, therefore, the cap would make little or no difference. Equally, the insurance requirements would remain high. A cap would not make the insurance requirement less; it would simply make it more ascertainable. There are also concerns that the cap would encourage poor performances and weaker audits. From a competitive point of view, those in opposition to the cap were concerned that such a move would reduce the competitive position of European companies in comparison to other international jurisdictions where no such cap exists.
Concerns were also raised that a cap on auditors’ liability would be contrary to the overall proposition of better regulation that the EU has been working towards, in recent years[7].
Alternative Options选择选项
As it is accepted that the main reason for imposing such a cap would be to open up the international auditing market to other mid sized auditing firms; alternatives to a cap on liability were also considered by the EU because of the potentially negative competitive impact of such caps.
由于普遍认为，设置这样一个上限的主要原因是向其他中型审计公司开放国际审计市场;欧盟也考虑了债务上限的替代方案，因为这种上限可能对竞争产生负面影响。
One of the possible options is to impose a compulsory insurance on audit firms. There is currently an insurance gap where the amount that an insurer is prepared to insure an auditor for is substantially less than the potential liability. Forcing the auditor to take out insurance to cover all losses would not be practicable due to the high level of potential risk. Therefore, the premiums would be prohibitively expensive, particularly for the smaller firms. Alternatives to funding this additional insurance would have to come from investors or the companies themselves.
Another approach would be to reduce the potential risk faced by auditors by introducing safe harbours. This would involve carving out certain areas from the potential liability of the auditor such as any external reviewers’ comments on the company or any future plans which have happened after the end of the financial accounting year. However, in doing this, there are fears that the underlying principle of professional judgment would be eroded in favour of formalised approaches to ensuring that as much of the safe harbour carve out could be enjoyed.
EU Recommendations欧盟的建议
On considering all of these factors and a widespread discussion of the pros and cons of the possibility of a cap on auditors’ liability, the EU commission has established a proposal that aims to achieve the middle ground[8].
考虑到所有这些因素，并就是否可能对审计师的责任设定上限展开了广泛的讨论，欧盟委员会(EU commission)制定了一项旨在实现中间立场[8]的提案。
When considering the four options as stated above (cap for all European audits, cap based on size of audit firm, cap based on the fee and a proportionate regime), the EU Commission concluded that a combination of a proportionate liability and an auditors’ cap on liability would make the foundations of their recommendations. The report advised member states to require a limitation to auditors’ liability to be established either through a statutory cap, a limitation based on proportionality or limitation of liability through the contract between the audit company and the auditor.
Proportional liability gained considerable support from the non-auditing respondents to the proposals as it was felt that this would deal with the issue of reliance on auditors’ deep pockets, but would also ensure that the quality of the audit would be maintained. The commission recommended that any member state implementing this approach should not set a specific proportion and should simply set the principle in place to be applied through the judicial processes, where necessary.
Unsurprisingly, the auditing profession preferred the concept of a cap on liability, arguing that it would have no long term impact on the quality of the audit and would allow mid sized firms to enter the market. This was not entirely followed by the EU Commission who preferred to suggest a principle of proportionate liability.
Based on all arguments, the EU Commission has advised a regime of proportionate liability across all member states.
Conclusions结论
The issue of auditors’ liability and how risk is apportioned has been raising concerns on an international level and has, therefore, become the subject of an EU Commission report. Currently, the international auditing market is heavily dominated by the big four accounting firms and several barriers of entry exist to prevent mid sized firms entering the market. Many of the barriers result directly from the fact that auditors are jointly and severally liable for misstatements in the financial accounts. Therefore, due to their deep pockets, auditors are often the main target for those taking actions against struggling companies[9].
审计师的责任和风险如何分配的问题一直在国际层面引起关注，因此已成为欧盟委员会(EU Commission)一份报告的主题。目前，国际审计市场由四大会计师事务所主导，并存在若干准入壁垒，阻止中型会计师事务所进入市场。许多障碍的直接原因是审计员对财务帐目的误报负有连带责任。因此，由于雄厚的财力，审计师往往是那些对陷入困境的公司采取行动的主要目标。
Based on this position, the EU Commission looked into the option of establishing a cap on liability (either statutorily or through contractual provisions). After careful consideration of all of the options, it was felt that a principle of proportionality would be the best approach, given all of the issues raised. It was concluded that proportionality would reduce the deep pockets issue, yet would still ensure that the level of quality of auditing work is maintained. This level of proportionality should not be cast in stone and should be established on a case by case basis. It is anticipated that this will provide sufficient security for the smaller auditors to compete on a level playing field with the domain that has traditionally been that of the big four firms.
基于这一立场，欧盟委员会研究了设立责任上限的选择(通过法定或合同条款)。在仔细审议了所有备选办法之后，鉴于所提出的所有问题，认为相称原则是最好的办法。会议的结论是，相称性将减少资金雄厚的问题，但仍将确保维持审计工作的质量水平。这种相称程度不应是一成不变的，而应根据具体情况加以确定。预计这将为较小的审计机构提供足够的安全保障，使它们能够在一个公平的竞争环境中与传统上属于四大会计师事务所的领域竞争。
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