Auditors versus third parties and others: the unusual case of the Spanish audit liability “crisis”

Abstract

This paper challenges the increasingly accepted position that, internationally, the audit profession is facing a major liability crisis. Its analysis of auditing developments in Spain since the late 1980s reveals an audit liability “crisis” which is more the result of the profession’s campaign to align itself with legal regimes abroad rather than a direct consequence of major legal settlements in favour of third parties. The Spanish experience is made particularly interesting by the dramatic change in the auditing profession’s stance - clearly rejecting responsibilities and legal traditions that it had willingly accepted just over a decade ago (when auditing was established in statute). A major implication of the paper is the need for notions of “international” and “crisis” to be used with great care in the audit arena and for their mobilising power to be recognised, especially given the limited availability of detailed studies of different national auditing contexts.