Reflect on risk
Accountants must manage risk and the extent of their potential liability to clients and third parties when providing professional services.
Another Technical Release that members will find valuable in managing professional liability is TECH 01/03AAF (Revised) The audit report and auditors’ duty of care to third parties. This offers guidance on what is generally referred to as ‘the Bannerman paragraph’, which is widely used by the profession in the statutory and non-statutory audit reports and other assurance reports of a range of entities.
TECH 01/03AAF was updated in 2018 based on legal advice relating to the positioning of the Bannerman paragraph, as explained in an Audit & Beyond article.