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Pressure for firms to update

Roger Trapp
Thursday 08 February 1996 19:02 EST
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ROGER TRAPP

More than 80 per cent of finance directors at top companies believe professional firms should take measures other than simply improving their services to limit exposure to rising negligence claims.

The greatest concern was over accountancy practices, with 90 per cent agreeing that they were exposed to excessive penalties arising from negligence claims. But more than half felt that corporate consumers of all kinds of professional services ought to be concerned about "the commercial insecurity arising from the fear of ruinous litigation".

Only 5 per cent of those surveyed by Fishburn Hedges corporate and financial public relations consultancy felt that quality would suffer if firms opted for incorporation to give themselves better protection against claims.

Only 18 per cent felt it would lead to less independence of mind, a key attribute of professionalism, while 14 per cent thought it would lead to a less collegiate service to clients - sometimes said to be a leading benefit of partnership.

As the findings amount to what is believed to be the first independent assessment of clients' views, they will hearten Colin Sharman, senior partner of KPMG, the big-six accountancy firm that has led the way in this area by incorporating its audit arm.

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