Auditor Liability

Auditor Liability Throughout the Eighties and into the Nineties the question of liability has become more prevalent in the practice of public accounting. Recently, the AICPA has been lobbying for liability reform in cases involving negligence or malpractice by public accountants. Opposition to this lobbying has come from consumer advocacy organizations, trial lawyers' associations, and state public interest groups to name a few. (Bolinger p. 53) The key to success for the AICPA, according to Gary …

…The above argument shows major points used by both sides in the ongoing fight involving liability reform in public accounting. Additionally it suggests that the profession itself need bear the burden of deterrence, enforcement, and investigation whereby eliminating the existing systems only strength. If the AICPA in cooperation with state boards becomes more willing to accept the role as investigator and punisher, then the economics of the argument suggest that liability reform is in order.