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With respect to constraints on the accounting profession designed to ameliorate conflict of interest problems, Canada would appear to be most similar to the United States in prescribing few legal restrictions on entrepreneurial activity, while France is clearly the most restrictive. An interesting aspect of the French system is the uniform system of accounts requirement. The authors of one book find that:

The main advantage of the uniform plan is that it facilitates and permits better government decision making because all firms covered by the plan must follow identical procedures and formats for accounting reports. Thus interindustry and intraindustry comparisons are easier to make, and strengths and weaknesses, opportunities and bottlenecks are easier to identify. Once identified, the government can change the plan or change the inducements and more readily observe the impact of such changes.(n144)

Although American observers might see little advantage in a program designed to facilitate governmental intervention in individual corporate affairs, and might argue that such standardization restricts management judgments as to what accounting treatments are most appropriate for specific organizations, the French scheme would certainly shorten the learning curve for both auditors and outside users of the financial information.

APPORTIONMENT OF DAMAGES AS A LIMITING PRINCIPLE

As noted elsewhere in this article, structural reform of the auditor-client relationship is unlikely. Thus, the courts may be called upon to define better the role of accountants in covering the damages caused by their clients and themselves. In this part of the article we examine what we believe to be the soundest approach to allocating the risks associated with the negligent auditing of financial information. We will show that the fairest and most economically efficient rule is to limit tort damages in proportion to the tortfeasor's culpability.

In the simplest case, a negligent actor is responsible for all the legally cognizable harm she proximately causes. Yet even the concept of proximate cause represents a fundamental dissatisfaction with the notion of unlimited tort liability. In Ryan v. New York Central Railroad Co.,(n145) the court was concerned that the defendant railroad would be unable to bear the costs of a spark-caused fire that had spread beyond one adjacent building. It held, therefore, that damage to successive properties was not legally caused by the defendant's negligence.(n146)

That tort liability might prove ruinously heavy has always been an important factor in the administration of negligence doctrine.(n147) Unhappily, for most of the history of the American negligence regime, liability limiting defenses and doctrines in cases of indivisible injuries have been "all-or-nothing" affairs.(n148) Either the defendant would be subject to the full range of damages, or would escape liability altogether. American courts were reluctant even to consider that liability for a single harm might be apportionable. They may have perceived that apportioning causation would be difficult, if not impossible,(n149) and any other basis for apportionment would lack scientific rigor.(n150) The fear that arbitrariness, emotion, and speculation might determine awards was too great for judges and legislators to take the notion of apportionment of damages seriously.(n151)

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