Since Andersen went out of business for obstructing justice, auditors have been pushing hard for liability caps. It's something I have examined here, here, here, here and here.

Now a new study might give them even more ammunition.

Research from the Knowledge@W.P. Carey series reveals a sharp deterioration in the opinion that judges have of auditors in the post-Enron era.

The researchers found that fewer judges believe the standards of the average audit practice are high. Also, fewer believe auditors are independent. More than ever before, judges now feel auditors should be watchdogs for the public good and hunt down fraud, no matter how small the amount.

Now, auditors would claim that financial statements are primarily management's responsibility but judges are less convinced about that argument.

According to the researchers quoted in the piece, auditors are aware of the shift in judges' attitudes and are showing more backbone. Maybe, but there are some lawsuits ahead that would concentrate the minds of beancounters. And the issue of liability caps is still in the air.


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