Law Commons^™

Confidence In The Nonprofit Sector Through Sarbanes-Oxley-Style Reforms, Joseph Mead

Michigan Law Review

Over the past several years, the nonprofit sector suffered a series of highly visible scandals that shook the public's confidence in charitable organizations. Concerned politicians and nonprofit leaders responded with a variety of reforms inspired by the Sarbanes-Oxley Act. The Note focuses on three such reforms: requiring nonprofit officers certify financial statements, mandating audits of nonprofits' financial statements, and imposing independent audit committees on nonprofit boards of directors. This Note argues that, contrary to the conclusions of many commentators, these reforms will provide a net benefit to the nonprofit sector by increasing donor confidence while imposing minimal costs.

Auditor Changes And Opinion Shopping- A Proposed Solution, Dale R. Rietberg

University of Michigan Journal of Law Reform

This Note argues that the existing regulatory mechanism has failed to address adequately the problem of opinion shopping, and that better means of ensuring the reliability of financial statements are needed. Part I describes the nature and extent of the opinion-shopping problem, including a discussion of its larger, macroeconomic impact. Part II argues that the underlying causes of the problem are systemic and that present safeguards against opinion shopping are inadequate. Finally, Part III examines some alternative solutions and proposes a system of Accounting Issue Inquiry Centers under the direction and auspices of the SEC. These Centers would be designed …

Negligent Accounting And The Limits Of Instrumental Tort Reform, John A. Siliciano

Michigan Law Review

This article first explores the relationship between the accountant and the reliant third party, and recounts the mounting judicial hostility to the accountant's traditional privity defense. Next, the article critically examines the arguments that have supported traditional privity-based regimes. The third section turns to the reform courts and tests whether the rationales offered for reform justify abandoning the privity requirement.

Concluding that a convincing case for reform has yet to be made and - given the complexity of a properly executed instrumental analysis - may never be made, the article's final section reconsiders the utility of instrumental reasoning as a …