Auditors Decry Plan to Broaden Liability for ‘Innocent Mistakes’

A lone error in judgment could kill auditors’ careers under a proposal that would lower the bar for certain disciplinary actions, audit firms and other stakeholders warned the US accounting oversight board.

The proposed rule changes would have a chilling effect on the profession, curbing collaboration among audit leaders and team members while crimping interest in a field that has struggled to attract newcomers, auditors and business groups said in letters to the Public Company Accounting Oversight Board.

More than two dozen letters responded to a September proposal that would lower the liability threshold from reckless to negligent for the ...