Overview

incorporation of audit firms


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The forming of a limited company by an audit partnership to limit its liability against claims for negligence. This is permitted under the Companies Act; a limited company can be established, which is owned by the partnership. Although partners directly involved in an audit can be sued, incorporation should prevent other partners from losing everything they own merely because they are members of the partnership. See also limited liability partnership; professional indemnity insurance.

Subjects: Accounting.


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