Bannerman paragraph clarified: what it means for auditors

Following uncertainty about use of the Bannerman clause, ICAEW has issued revised guidance, Technical Release 01/03AAF The audit report and auditors’ duty of care to third parties. Helen MacNeill ACA, senior technical writer at Croner-i, explains the implications for auditors

A Bannerman paragraph has been used by auditors for over 15 years to manage the risk of inadvertently assuming a duty of care to third parties in relation to their audit reports. Whether you are a preparer or user of audited financial statements, you are likely to have seen one:

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