Understanding How Auditors May Be Exposed to Accountants’ Negligence and Malpractice Suits by Failing to Properly Assess An Entity’s Internal Controls

Gaining an understanding of an entity’s system of internal control is a critical component of conducting an audit. The American Institute of Certified Public Accountants mandates in the body of professional guidance known as Generally Accepted Auditing Standards (“GAAS”) — specifically, within Field Work Standard No. 2, that auditors perform this fundamental exercise at the…

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Five Things Financial Statement Users and Litigators Should Know

Executive Summary Fraud in company financial statements is a problem that affects users in most countries today, and some believe that this problem is only getting worse. While independent auditors render opinions that give investors confidence in the accuracy of a company’s reported financial performance, when fraud is uncovered, resulting litigation often focuses on the…

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Five Strategies for Audit Committees to Rebuild Public Trust and Confidence in Financial Reporting

Management fraud and auditor failure to find that fraud have received the greatest share of attention to date; and relatively less attention has been directed at the role of audit committees in these financial reporting failures. The current cycle of financial reporting scandals has already caused further attention to be given to the issue of…

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