Magazine article The CPA Journal

Attorneys Say No to Whistle-Blowing Legislation

Magazine article The CPA Journal

Attorneys Say No to Whistle-Blowing Legislation

Article excerpt

In a letter to Senator John F. Kerry and Representative Ron Wyden, the Section of Business Law of the American Bar Association( the "Section") expressed its serious doubts regarding how effective the proposed Federal legislation would be requiring independent public accountants to make disclosures of material illegal acts by clients. and went on to say the legislation might go so far as to damage the auditor-client relationship. An additional concern was the impact of the proposed legislation on the civil liability exposures of CPA firms and the availability of competent accounting and auditing services to publicly held companies.

This rather startling position o the Section runs contrary to the views of the AICPA and the Public Oversight Board of the SEC Practice Section which have supported the legislation.

The basis for objection centers on the Sectiun's question of the ability of CPAs to determine whether a particular action is illegal. In its view, "CPAs are neither qualified nor licensed to make such judgments. To make matters worse they are given this investigative responsibility without corresponding investigative powers (i. …

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