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Unformatted text preview: 401 C HAPTER 51 P ROFESSIONAL L IABILITY AND A CCOUNTABILITY A NSWER TO C RITICAL A NALYSIS Q UESTION IN THE F EATURE INSIGHT INTO ETHICS CRITICAL THINKING INSIGHT INTO CULTURE (PAGE 1061) Some people, particularly Europeans, argue that the United States has a lawsuit culture. In other words, whenever someone does not like the outcome of something, he or she sues. Do you think that the Overton case outlined above was just part of our lawsuit culture, or did David Overton have a valid reason to sue Direct B rokerages auditors? Explain your answer. Yes, the investors were dissatisfied with the result of their investment and looked for the most likely scapegoat, which here was the accountant. Sometimes, one must simply suffer the consequence of a bad turn o fate. No, because for economic and other progress, there must be standards and those standards must be applied. In circumstances like those in the Overton case, when an accountant issues a certified opinion, it creates a special relationship with investors. Thus, accountants have a duty to take reasonable steps to correct misstatements that they discover in previous financial statements on which they know the public is relying. The applied standard here is that silence in this situation can constitute a false or misleading statement under Section 10(b) and Rule 10b-5 A NSWERS TO Q UESTIONS AT THE E NDS OF THE C ASES CASE 51.1 QUESTIONS (PAGE 1051) 1A. The standards for defining professional misconduct appear to focus on an acts impact on third parties rather than its effect on the professional. Is this the appropriate focus? Why or why not? Yes, this is the appropriate focus because the protection of the public is the purpose of, and the reason for, the rules of professional conduct. No, this is not the right focus, although innocent third 402 UNIT ELEVEN: SPECIAL TOPICS parties should be made whole if possible, because wrongdoers must also be transformed to conduct themselves properly for their own good. 2A. Should an attorney's misbehavior be considered a violation of the rules of professional conduct even if he or she is not convicted of a crime? Discuss. Yes, and it generally does. In this case, the court held that an attorney's criminal act can support a violation of rule of professional conduct prohibiting a lawyer from committing a criminal act that reflects adversely on the lawyer's honesty, trustworthiness or fitness as a lawyer, even if the attorney is never charged or convicted. The court also held that the rules, which prohibit a lawyer from committing a criminal act that reflects adversely on the lawyer's honesty or trustworthiness, or fitness as a lawyer, do not require a connection between the act and any legal services that the lawyer renders....
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- Spring '09
- Business Law