Page 139 - Leaders in Legal Business - PDF - Final 2018
P. 139
profession has found a potentially viable way forward with the “network” definition and
therefore an approach that better safeguards concepts of independence and ultimately the
necessary ethical standards of a sophisticated and regulated profession. The lack of uniformity in
the detailed application of the regulations for the accounting profession, for example throughout
the different countries of the EU, however, weakens to a certain extent this achievement.
Vicarious liability, a specific concept of tort, is an essential doctrine beyond the borders
of common law. The necessary clarity cannot be found in recent case law. There is a tendency
that law firm networks opt for the Swiss Verein, while accounting firm networks and
associations avoid this structure and currently prefer companies limited by guarantee.
Whatever the choice of corporate structure for networks, associations, or TOPS, whether
it is a law firm, accounting firm, or multidisciplinary organisation, both statute and ethical
principles and regulations should supersede corporate veils,21 national borders, and potential
loopholes to ensure that auditor independence, client loyalty, duty of care, privilege, and strict
avoidance of conflict of interest prevail. This should be ensured for the benefit of clients and
consumers, regardless if an organisation is multidisciplinary or not.
21 LORRAINE TALBOT, CRITICAL COMPANY LAW 49 (Routledge-Cavendish, 2016): “Misuse of the corporate veil has the most pernicious
consequences for society in the context of businesses that have been organized as groups of companies. Groups of companies can be used, inter
alia, to avoid liabilities arising from the injury to persons, damage to the environment or to avoid tax.”
125
therefore an approach that better safeguards concepts of independence and ultimately the
necessary ethical standards of a sophisticated and regulated profession. The lack of uniformity in
the detailed application of the regulations for the accounting profession, for example throughout
the different countries of the EU, however, weakens to a certain extent this achievement.
Vicarious liability, a specific concept of tort, is an essential doctrine beyond the borders
of common law. The necessary clarity cannot be found in recent case law. There is a tendency
that law firm networks opt for the Swiss Verein, while accounting firm networks and
associations avoid this structure and currently prefer companies limited by guarantee.
Whatever the choice of corporate structure for networks, associations, or TOPS, whether
it is a law firm, accounting firm, or multidisciplinary organisation, both statute and ethical
principles and regulations should supersede corporate veils,21 national borders, and potential
loopholes to ensure that auditor independence, client loyalty, duty of care, privilege, and strict
avoidance of conflict of interest prevail. This should be ensured for the benefit of clients and
consumers, regardless if an organisation is multidisciplinary or not.
21 LORRAINE TALBOT, CRITICAL COMPANY LAW 49 (Routledge-Cavendish, 2016): “Misuse of the corporate veil has the most pernicious
consequences for society in the context of businesses that have been organized as groups of companies. Groups of companies can be used, inter
alia, to avoid liabilities arising from the injury to persons, damage to the environment or to avoid tax.”
125
