دانلود رایگان مقاله انگلیسی بررسی محیط حقوقی کنونی در برابر حرفه حسابداری دولتی: سیاست ایالات متحده - Sage 2017

Abstract

We examine the recent history and trends of U.S. auditor liability to third parties to help regulators and legislators develop policies to protect and maintain audit quality while limiting auditor liability exposure. Although the United States has yet developed a formal policy to address auditor liability, some European Union member countries and Australia, in varying degrees, support such limitation. Thus, we also explore current EU and Australian policies as examples of potential recommendations to U.S. policy makers. In light of a litigious environment, U.S. Certified Public Accounting firms generally accept potential clients only after analyzing potential risks, dismiss many risky clients, raise their total or hourly fees, spend more time examining attestation evidence, and perform other procedures to reduce their litigation risk. This risk arises largely from the federal and state legal systems, assuming that auditors can better absorb and control losses from misleading financial statements than can financial statement users. While culpable, this litigious environment led to the demise of two large international Certified Public Accounting firms—Arthur Andersen and Laventhol & Horwath. Is the global economy better off having fewer accounting firms with the capacity to perform international audits? A Public Company Accounting Oversight Board’s recent Exposure Draft would require auditors of issuers to expand significantly their audit reports beyond current Pass/Fail standards, which could increase audit firms’ disclosures and resultant liabilities. After examining U.S. federal and state statutes plus court decisions regarding auditor liability, we suggest methods to protect the public while allowing audit firms to thrive in these environments.

Summary and Conclusion

The Big-Four CPA firm’s current legal liability environment seems ‘‘difficult,’’ especially because PCAOB standards include requiring different firms to do tax and other ancillary services than those who perform audits and mandatory or client-requested audit firm rotations. Potential dangers arise in empowering few CPA firms, and attracting and retaining talented CPAs upon seeing the demise and related financial ruin of the partners of another large failed audit firm.

Methods to limit liabilities include liability caps, governmental insurance, engagement letter, or other contract clauses to limit auditor’s liability to clients or to third parties, increased requirements to restrict legal standing to initiate civil cases, and moving to proportional liability. Sliding liability caps and proportional liability have the advantage of reducing auditor liability, while maintaining audit quality and industry capacity.

Differences between EU/U.K./Australian and U.S. legal systems include ‘‘loser pays’’ in unsuccessful civil trials, banning contingent fees, and a much lower ratio of available lawyers—U.S. policy makers should adopt key parts of other counties’ policies to sustain the profession’s long-term viability. Adopting U.K./EU/Australian methods provides ideas such as sliding liability caps and contract clauses to help both Big-Four and second-tier firms thrive for the foreseeable future. Also moving away from ‘‘joint and several’’ to ‘‘proportional’’ liability affects positively the profession’s capacity to reduce the publics’ ‘‘deep pockets’’ view of the profession. While the current contentious national environment impairs Congressional (but not PCAOB, SEC, or other regulatory) action on these matters, perhaps individual state legislatures and other regulators can implement many such provisions. While national action derives a single set of rules, state-by-state implementation would continue the current differences in legal matters facing CPA firms.