The US Securities and Exchange Commission (SEC) has indicated to the UK Government that it will not accept liability limitation agreements (LLAs) between auditors and British companies registered with the SEC. This will have the effect of disallowing LLAs with around half of the FTSE 100 companies. The SEC’s main concern appears to be that the negotiations required between auditors and company directors to agree the limits of liability might compromise auditor independence. The Professional Services Global Competitiveness Group has published a report outlining the medium and long term challenges facing the UK professional services sector. The report discusses the dangers of the UK accountancy industry being at a disadvantage to those in Europe who have liability limitation (eg Germany) and those economies like Australia which have recently implemented liability limitation. The report discusses the opportunity presented by the change of leadership at the SEC and urges the government to continue to press the SEC to approve the principle of LLAs. The report recognises the difficulties associated with LLAs and concludes that the government should consider alternative solutions to keep the UK accountancy industry competitive in the international market.