Academic journal article Journal of Accountancy

Dodd Commends Profession's Efforts in Championing Litigation Reform

Academic journal article Journal of Accountancy

Dodd Commends Profession's Efforts in Championing Litigation Reform

Article excerpt

Senator Christopher J. Dodd (D-Conn.) said members of the American Institute of CPAs deserve a great deal of credit for gains achieved in bipartisan support for litigation reform legislation in the Senate. In an informal meeting in May with members of the AICPA board of directors, Dodd said the number of senators from both parties who wished to cosponsor the Private Securities Litigation Reform Act (S 240) was on the rise. "We are doing a much better job of signing on members of Congress," Dodd said. "And it is because your members have gone out of their way to talk about this issue' "

Securities litigation reform legislation is designed to reduce liability exposure for companies of all sizes by establishing a system of proportionate liability in which defendants are responsible only for the share of damages caused by their own actions. Under the current system of joint and several liability, an accounting firm that is only 1% liable can be forced to pay 100% of the judgment if the primary wrongdoers are insolvent. Litigation reform is a top-priority issue for the AICPA and its key person program, a grassroots effort to maintain personal contact between CPAs and elected representatives. …

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