There is some good news for auditors and their professional indemnity insurers for once. A recent decision in the Barings litigation has confirmed the limited scope of duty which an auditor can owe to a third party.
In recent times, auditors have been first in the liquidators’ sights as soon as a company collapses. As they were not involved with the management of the company pre-collapse, liquidators are free to cast aspersions as to how the company was run and to construct, with the benefit of hindsight, how it should have been run.
