Audit - -> 30's 30 - 45 45 - 66 1967 – 1999 Ultramares...

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Legal Liability: Perspective 1. Legal liability promotes audit quality? 2. Desire to avoid high risk client -> affect on start up companies, ability to associate with soft data like forecasts 3. Fees must cover risks not just audit costs – an insurance premium 4. We are a litigious society How many attorneys in the US, the world's largest economy? How many in Japan, the 2nd largest economy? A. Litigation risk differs by type of engagement, size of client, size of firm, type of industry, falls under purview of SEC acts B. few major cases ( < 1%) but the few have had a profound effect C. change in legal environment; why? 1. visibility of accountants and their responsibilities 2. greater complexity of accounting and auditing 3. greater acceptance for lawsuits regardless of blame, more litigious society, more lawyers 4. contingency fees (nothing to lose; everything to gain), class action suits 5. willingness to settle out of court
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Audit Liability: Historical Perspective
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Unformatted text preview: -> 30's 30 - 45 45 - 66 1967 – 1999 Ultramares Equity Funding (insurance policies, computer, 100 EEs) McKesson Robbins Yale Express (consulting) Continental Vending – GAAP is not enough, criminal Fund of Funds- duty of fraud transcends duty of confidentiality ESM Securities- poor quality controls, no SPR ZZZZ Best, Bar Chris, Hockfelder Lincoln Savings and Loan Penn Square, BCCI, Pharmor, Miniscribe Rusch Factors Rosenblum Credit Alliance Bar Chris Construction (SEC Act 1933) Hochfelder (SEC Act of 1934) 1136 Tenants Case Cendant, Waste management Legal Liability: Perspective AUDITOR COMPANIES Arthur Andersen Enron, WorldCom, Qwest, Global Crossing, Dynegy, CMS Energy, Halliburton, Peregrine, Merck, Waste Management, Baptist Foundation, Adecco, HTH Australia PricewaterhouseCoopers Tyco, BCCI KPMG Xerox, MCI Deloitte & Touche El Paso Corp., Adelphia Ernst & Young AOL, Williams Cos., Healthsouth, Adecco Grant Thornton Parmalat, Finimatica, MCA Financial...
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This note was uploaded on 10/05/2011 for the course ACG 5637 taught by Professor Monikacaushoulli during the Fall '08 term at University of Florida.

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Audit - -> 30's 30 - 45 45 - 66 1967 – 1999 Ultramares...

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