With companies going under every day and new frauds being uncovered with alarming frequency, auditors are increasingly concerned about being targeted in the aftermath. Robust balance sheets and professional indemnity insurance make accountancy firms (esp. big 4)  particularly attractive to disgruntled creditors.

In April, representatives of the Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers met Lord Mandelson to plead for new measures to cap their liability reports The Times. They were turned down on the basis that the Companies Act 2006 already enabled caps to be agreed with company directors if shareholder approval could be gained. However, the caps are not often used because of US regulator, the SEC’s objections.

As The Times noted, the big four auditors had hoped to persuade Lord Mandelson to amend the legislation to address the SEC’s concerns and to encourage companies to limit their auditors’ liability. Apparently they used the old “we’re too big to fail” ruse but looks like it fell on deaf ears.

Audit firms left unprotected against claims of negligence [The Times]