ACCA Advanced Audit and Assurance (AAA) Auditors’ Liability

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1. Kim Smith says

   January 10, 2019 at 9:50 am

   The Caparo decision is that the auditor has a duty of care to current shareholder as a class (for their common needs, e.g. to exercise their rights as shareholders) and not to individual shareholders (whether existing or prospective). The decision basically brought some sense to litigation in England and Wales – it simply isn’t reasonable to expect auditors to anticipate the wide range of varying needs that individual users of financial statements might have.
   The point in the RBS case was that the auditor knew that the bank would rely on the financial statements.

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2. mjibola says

   October 16, 2018 at 7:10 am

   The conclusion on the two case studies are contradicting. Why were the investors not able to sue for damages and the bankers were? Shouldn’t the auditors have known that investors would also use it for investing decisions?

   Both investors and banks are big users of financial statements.

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   • Yayoun says

     September 28, 2024 at 11:27 am

     it’s all about proximity. In capparo case the Auditor was not aware that Capparo would have take over. In the second case Auditor were aware that lender (existing lenders) rely on FS to continue to lend money.

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