Professionals such as accountants, attorneys, physicians, architects, and others are increasingly faced with the threat of liability. One of the
reasons for this is that the public has become more aware that professionals are required to deliver competent services and are obligated to
adhere to standards of performance commonly accepted within their professions.
Certainly, the dizzying collapse of Enron Corporation and the failure of other major companies, including WorldCom, Inc., in the early
2000s called attention to the importance of abiding by professional accounting standards. Arthur Andersen, LLP, one of the world's leading
public accounting firms, ended up being indicted on criminal charges for its role in thwarting the government's investigation into Enron's
As a result, that company ceased to exist and roughly 85,000 employees lost their jobs. Moreover, under the Sarbanes
-Oxley Act of 2002, which Congress passed in response to these events, public accounting firms throughout the nation will feel the effects for
years to come. Among other things, the act imposed stricter regulation and oversight on the public accounting industry.
Considering the many potential sources of legal liability that they face, accountants, attorneys, and other professionals should be very aware
of their legal obligations. In this chapter, we look at the potential liability of professionals under both the common law and statutory law. The
chapter concludes with a brief examination of the relationships of professionals, particularly accountants and attorneys, with their clients.
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