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Royal Bank of Scotland v Bannerman Johnstone Maclay

The Royal Bank of Scotland v Bannerman Johnstone Maclay case in 2002 had a significant impact on the treatment of auditor liability. On this page you can find articles, books and online resources providing commentary on the case and the issues surrounding it.

Useful links

The case

Royal Bank of Scotland v Bannerman Johnstone Maclay (2005)
Full text of the opinion in RBS v Bannerman issued by the Scottish Courts on 23 May 2005, following a reclaiming motion and cross-appeal.

Other relevant cases

Barclays Bank PLC v Grant Thornton UK LLP (2015)
Full text of a more recent judgment of the High Court in England, which has since provided helpful guidance. The case related to the effectiveness of a Bannerman-type clause disclaiming responsibility in an audit report Grant Thornton had prepared.

ICAEW guidance

The audit report and auditors' duty of care to third parties
Updated guidance (Technical release AAF 01/03) issued by the ICAEW Audit and Assurance Faculty in May 2018, to assist auditors in managing the risk of inadvertently assuming a duty of care to third parties in relation to their audit reports. Contains an example audit report with an unqualified opinion for a non-publicly traded company.

'Bannerman paragraph' update
Practicewire June 2018 news article on the revised ICAEW Technical release AAF 01/03 guidance. 

Bannerman Clarification Language: Revision for Companies Act Reports
Update given in 2010 to the language recommended in Audit 01/03 following changes to the Companies Act 2006.

Update on AUDIT 01/03, The Audit Report and Auditors' Duty of Care to Third Parties
Update given in 2008 to the ICAEW technical release following the introduction of the Companies Act 2006.

Bannerman Wording – Application to Other Public Reports
Article published in August 2003 by the ICAEW Audit and Assurance Faculty. Gives suggestions for appropriate wordings in public reports other than audit reports. See pages 6-7.

Auditors' Limited Liability Agreements
Information for auditors and company directors on limited liability agreements (LLAs). Includes links to related ICAEW content, FRC guidance and a legal opinion obtained on LLAs.

Articles and books in the Library collection

Selected articles and books

'Bannerman clause' upheld in Von Essen
Accountancy (April 2015, p.64)
Article on the first case to test the effectiveness of Bannerman disclaimer clauses.

Preparing audit reports
(Wolters Kluwer, 2016)
Guide to preparing reports within the UK legal framework, with special reference to the use of ‘Bannerman paragraphs’.

Further articles and books

To find out how you can borrow books from the Library please see our guide to book loans.

You can obtain copies of articles or extracts of books and reports through our document supply service.

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