Open Access. Powered by Scholars. Published by Universities.®

Law Commons

Open Access. Powered by Scholars. Published by Universities.®

Columbia Law Review

2006

Labor and Employment Law

Articles 1 - 1 of 1

Full-Text Articles in Law

Cataclysmic Liability Risk Among Big Four Auditors, Eric L. Talley Jan 2006

Cataclysmic Liability Risk Among Big Four Auditors, Eric L. Talley

Faculty Scholarship

Since Arthur Andersen's implosion in 2002, policymakers have been encouraged with ever increasing urgency to insulate the auditing industry from legal liability. Advocates of such insulation cite many arguments, but the gravamen of their case is that the profession faces such significant risk of cataclysmic liability that its long term viability is imperiled. In this Essay, I explore the nature of these claims as a legal, theoretical, and empirical matter. Legally, it is clear that authority exists (within both state and federal law) to impose liability on auditing firms for financial fraud, and courts have been doing so sporadically ...