C2Part 16Audit

Annotations:
Modifications etc. (not altering text)

Chapter 6Auditors' liability

Liability limitation agreements

C1I1535Terms of liability limitation agreement

1

A liability limitation agreement—

a

must not apply in respect of acts or omissions occurring in the course of the audit of accounts for more than one financial year, and

b

must specify the financial year in relation to which it applies.

2

The Secretary of State may by regulations—

a

require liability limitation agreements to contain specified provisions or provisions of a specified description;

b

prohibit liability limitation agreements from containing specified provisions or provisions of a specified description.

“Specified” here means specified in the regulations.

3

Without prejudice to the generality of the power conferred by subsection (2), that power may be exercised with a view to preventing adverse effects on competition.

4

Subject to the preceding provisions of this section, it is immaterial how a liability limitation agreement is framed.

In particular, the limit on the amount of the auditor's liability need not be a sum of money, or a formula, specified in the agreement.

5

Regulations under this section are subject to negative resolution procedure.