Role of Auditors and Legal Liability in Audit Assurance and Compliance

AUDIT ASSURANCE AND COMPLIANCE
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Executive summary
 The paper focuses on providing an analysis of the role of auditors and their
legal liability.
 Over the years, the audit profession has been facing an increase in litigations
and liabilities; this is highly costing the occupation, over billions of pounds.
 There have been several cases in court were auditor firms, had been
penalized for their negligence, fraud, misrepresentation of information,
especially those involving third parties.
 This has reduced competition among the auditing firms because small firms
will be shunning large listed companies because of the potential risks and
costs involved in auditing them.
 Within the auditing profession, auditors can make all the endeavors to reduce
the litigation and penalty rate since that for so long has affected the industry.

Introduction
 The critical responsibility performed by the auditor is to offer reasonable
assurance to financial statement users that information presented on that
statement is free form errors and right.
 The case under study is from the United Kingdom. Auditors within society
are responsible for providing assurance services.
 Therefore, investors within the public view them as the guarantor of
investment corporations (Marianne 2009).
 Auditors should always be alert in ways they are offering their services
(Samsonova-Taddei & Siddiqui 2016).

Auditing and litigation
 Auditing companies face different types of liabilities; some of these
liabilities are civil and criminal offenses.
 Criminal liability occurs to auditors when they have potentially breached
the imposed law by the government, and this means that criminal acts
offer a relationship between the state and the auditing entities
(Richardson & Eberlein 2011).
 The civil laws in auditing deal with differences or misunderstandings
between organizations and individuals (Marianne 2019).
 Auditor, like any other individuals, is limited by laws and rules within the
countries they are operating in.
 Under criminal law liability, auditors could be prosecuted with acts related
to insider trading and fraud.