Auditors and CPAs are going to find themselves more liable for
the truth of their clients' financial statements than in the past
according to Steven Smith, a Tulsa attorney.
Smith is the lead counsel in a $72 million class action suit
brought by the depositors of the bankrupt Republic Companies against
Wes McKinney, his board of directors and accountants.
"The great majority of accounting firms appear to be quite
diligent in performing their duties," Smith said.
"But accountants who have become lax are going to face more damage
awards for liability in the future."
Lawsuits are growing in number, Smith said, and stockholders and
investors are beginning to feel that an auditor who doesn't provide
accurate information to them is liable for their negligence.
Smith cited a growing number of cases involving major accounting
firms which are "increasingly imposing a whistle-blowing duty upon
Traditionally, accountants have taken the position they had no
duty but to their clients Smith said.
"The courts do not see it that way anymore. They feel the
accountant owes an explanation to all groups that might be affected.
This means a company board, the industry regulating agency and the
investing public," Smith said.
"No longer can the CPA firm look the other way and claim
The free and open market is at stake, Smith said, and the failure
to inform the investing public puts them at a disadvantage.
"They want to be able to trust what they are being told. Simply
putting down numbers on the page is not enough anymore. The users of
financial statements expect auditors to penetrate into company
affairs and to disclose any possibility of fraud or illegal
behavior," Smith said.
"The basic issue that we're trying to identify is, can we really
rely upon these financial statements - circulated by the millions in
the U.S. today - as the basis of all our investment activities?". . .
- The University of Oklahoma Legal Assistant's Program will
offer a three-session course beginning in June to deal with pension
and employee benefits.
Registration fee for the course is $100 per person.
The seminar will introduce participants to the basic concepts of
employee compensation with emphasis on qualified employment
The instructor for the course will be Jon Trudgeon, an Oklahoma
City attorney who specializes in pension and employee benefits. . .
- The Oklahoma Bar Association is sponsoring two seminars on
real estate law and trial preparation and practice.
- Considerations which must be given when transferring property,
as well as looking into some of the specific problems which arise
with certain entities, will be addressed by the Association May 23 at
the Sheraton Century Center Hotel in Oklahoma City.
The seminar will also consider:
- The impact of taxes.
- The effect of bankruptcy on transfers of property that must be
dealt with in numerous cases.
Registration is $90 and six-hours credit may be claimed for
continuing legal education. The course is approved by the Oklahoma
Real Estate Commission.
- The first of several courses presented by the Central Oklahoma
Association of Legal Assistants and the Oklahoma Bar Association is a
seminar on the nuts and bolts of trial preparation.
This course will deal with the most common mistakes made by
attorneys involving procedural problems commonly incurred by
Oklahoma County Court Clerk Tom Petuskey, U.S. Bankruptcy Court
Clerk Walter M. Mounts and U.S. District Court Clerk Francis Bonsiero
will speak to the participants.
The registration fee is $85 and four credit hours may be claimed
for continuing legal education. . .
- The Southwestern Legal Foundation will hold the 22nd Annual
Academy of American and International Law June 2-July 12 in Dallas,
which will provide an opportunity for leaders from other countries to
study American and international legal and businesses institutions,
with an emphasis on the legal framework necessary for economic and
social development. …