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I am wondering what does the disclaimer for third party mean? is it to protect auditors against the risk of third party claims? Since I see that Auditors will welcome the important decision of the Commercial Court in Barclays Bank plc v Grant Thornton UK LLP [18 February 2015] which is the first authority on a Bannerman disclaimer negating duties to third parties arising out of audit work.
The second paragraph (it became ‘standard’ as an paragraph to include within an audit report) would say that the audit was carried out because it was a legal requirement that an independent auditor should be appointed to report their opinion ….. but that the auditors’ liability was restricted to their liability to the client entity
This had the effect of (trying) to restrict the potential for third party claims against the auditor in line with the liability established by Bannerman
I’m not sure exactly where within the new format audit report the disclaimer might fit but I imagine that time will establish exactly the location of this (or a similar) paragraph will go
OK?
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