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An Assessment of Auditors' Civil Liability towards Shareholders in Comparative Perspective with Special Reference to Islamic and Conventional Insurance Principles and Practices
Author(s)
Date Issued
2020
Date Available
2021-09-02T11:35:04Z
Abstract
This thesis explores auditor civil liability towards the company and third parties in Saudi Arabia and selected common law countries. In Chapter One, the researcher outlines the methodology adopted to conduct this study using descriptive analysis as well as both doctrinal and comparative approaches. Chapter Two will present the nature of auditor civil liability towards companies and third parties in Saudi Arabia based on Islamic law of tort and modern legislation. Chapter Two also argues that as of 2020 the Saudi judiciary has struggled to cope with issues raised in common law countries due to the complexity of existing Shariah principles and regulation, the lack of understanding among judges and legal practitioners of shareholders’ right to be indemnified that may lead to a weak litigation culture. However, the Chapter identifies a few legal provisions and established Islamic principles that would entitle shareholders to be indemnified on behalf of their corporation through personal and class actions if the company refuses to file the suit for their benefit. Despite the fact that there is no specific article showing how a court can determine the proper damages suffered by shareholders, the researcher has designed mathematical formulae to assist Saudi judges in this respect considering Saudi legal regulations and Islamic principles. A better understanding on how Islamic principles and legal provisions operate, will hopefully assist and benefit judges, practitioners and litigants. This thesis argues in Chapters Three and Four that common law principles with respect to auditors’ civil liability to third parties, and more particularly to shareholders, are not satisfactory from the Saudi perspective. Chapter Three is focused on theories of auditor liability towards third parties, with a focus on the United States of America (US), perhaps the first country with a clear precedent in this respect. Chapter Four then looks at England where two contrasting cases with respect to the liability of the auditor, and some other related cases, are examined. Chapter Four also investigates auditors’ civil liability towards third parties in other common law jurisdictions that follow the approaches adopted in the US or in England either completely or partially. Since, in practice, the availability or non-availability of insurance to indemnify auditors against liability to shareholders and others has a significant impact on the topic under review in this thesis, Chapter Five then goes on to discuss the nature of Takaful - “an Islamic form of insurance” - and compares it to from conventional (western) insurance, and as well as the challenges that the Islamic model faces in Muslim majority and Muslim minority jurisdictions. Chapter Six develops that discussion by examining conventional liability products and exposing their limitations in providing appropriate protection and indemnification for those insured. Chapter Seven, draws together the key arguments, reasons and principles developed by common-law judges in the context of auditor liability, and explores a recent case from Saudi Arabia. The chapter also develops the discussion of the potential for insurance to extend to auditor liability by comparing and contrasting actual and existing applications of Takaful and conventional insurance in the area of professional liability. Chapter Eight addresses the research questions posed in Chapter One and concludes with final remarks and observations on the implications of the research.
Type of Material
Doctoral Thesis
Publisher
University College Dublin. UCD Sutherland School of Law
Qualification Name
Ph.D.
Copyright (Published Version)
2020 the Author
Language
English
Status of Item
Peer reviewed
This item is made available under a Creative Commons License
File(s)
Owning collection
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1461
Acquisition Date
Mar 28, 2024
Mar 28, 2024
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Acquisition Date
Mar 28, 2024
Mar 28, 2024