The Accountants’ Liability Controversy

Friday, January 1st, 1988 at 12:00 am by Frank J. Macchiarola
Frank J. Macchiarola, The Accountants’ Liability Controversy, 1988 Colum. Bus. L. Rev. 177

For several decades now many regulatory bodies have acted to raise the standards of care owed by service professionals to the public. This has been the case in the accounting profession, where the judiciary as well as the chief regulatory body for accountants, the American Institute of Certified Public Accountants (‘AICPA’) have joined the trend toward increasing responsibility. Under rules enacted in February, 1988 the AICPA made it clear that auditors had to assume more responsibility for the detection of fraud by improving audit effectiveness through detecting material misstatements, by communicating more useful information to users of financial statements about the nature and result of the audit process, and by communicating more clearly and directly with audit committees of the companies they serve. These changes are part of a process which has been going on in the profession for some time and which has generated considerable debate among practitioners and interested commentators.

Author Information

Professor of Business, Columbia University Graduate School of Business. B.A. 1962, St. Francis College; LL.B. 1965, Ph.D. 1970, Columbia University. Member of the United States Supreme Court and New York State bars.