The UK government on Thursday published its Company Law Reform Bill.

Under the measures proposed in the legislation, the liability of auditors will be capped, investors will gain powers to make company directors more accountable if they knowingly provide false information to auditors, and the establisment of SMEs will become easier.

The capping of auditor liability has been welcomed by the accounting industry, and speaking to The Guardian on behalf of Ernst & Young, the firm's general counsel, Victoria Cochrane suggested that the provisions are "a sensible safeguard against inflated claims directed at auditors which could have a catastrophic effect on accountancy firms".

The Bill must now be debated in Parliament, and is expected to become law in mid-2006.