Magazine article The CPA Journal

Accountants Seek to Evade Accountability

Magazine article The CPA Journal

Accountants Seek to Evade Accountability

Article excerpt

The October 17, 1994, issue of Barron's contained an article on liability reform that began as follows:

Something startlingly unwholesome is afoot in Washington. This is a process by which persons and groups--specifically accountants--who have defrauded investors or helped others to defraud investors are seeking to avoid responsibility through a corruption of the political process. The suspect effort is cloaked in phrases like "ending securities law abuses," and even "protecting investors' rights." But in fact, the whole well-funded effort is a sneak attack on law and investors' legal protection....

Author Benjamin J. Stein, adjunct professor of law at Pepperdine University in Malibu, California goes on to say as part of his explanation of the role of public accountants-

Investors do, in fact, rely on those numbers (that accountants say are right), for both bad and good. On the good side, the great majority of corporate books are kept scrupulously honestly and fairly, and investors really can rely on them. On the bad side, fraud or negligence by accountants that took investors was a vital part of every securities fraud of the 1980s and 1990s that I am aware of. …

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