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(n98) Lyon, supra note 93, at 72.

(n99) DEP'T TRADE & INDUS., PROFESSIONAL LIABILITY: REPORT OF THE STUDY TEAMS 23 (Andrew Likierman, Chairman, 1989) [hereinafter LIKIERMAN REPORT).

In May 1988 the Secretary of State for Trade and Industry announced the appointment of three fact-finding teams: "in the light of current concern about the cost and availability of professional indemnity insurance and the extent of civil liability for negligence to look into the problems of three related professions -- auditors, those involved in the construction industry and surveyors....

"

Id. at 5.

(n100) Id. at 23.

(n101) In discussing the auditor's "basic duty of care," the Likierman Report, supra note 99, stated:

It is claimed that no auditor who sets out on an audit can be certain how, if asked, the court would interpret the implied terms [of an audit engagement contract] in relation to that particular audit. In practice such an interpretation, if it becomes necessary, will be determined with hindsight by the court, which will hear evidence as to the standards which other accountants would have expected themselves to have applied to the particular circumstances at the particular time. Id. at 22. The Likierman Report authors concede that, while written professional standards do provide "a measure of certainty, compared with the other professions," and that these standards "are very strong evidence as to the proper standard," id., "the court may still take the view that this was not good enough in the particular circumstance. It has, further been represented to [them] that the court tends to lean in favour of the plaintiff in eases involving claims against auditors." Id. at 23.

(n102) See Marianne M. Jennings et al., The Auditor's Dilemma: The Incongrous Judicial Notions of the Auditing Profession and Actual Auditor Practice, 29 AM. Bus. L.J. 99, 115 (1991):

The other pre-case [judicial] belief with a high number of responses [to an attitudinal survey of judges] was that the auditor has the responsibility to search actively for fraud. The position of the auditing profession is that fraud cannot always be detected because auditors must rely on statistical sampling techniques. Although proper auditing techniques should bring to light certain types of frauds, auditors contend the client's employees or even management could veil the fraud and leave the auditor with no clues. However, the judicial attitudes suggest that, in spite of limited procedures and possible cover-ups, the auditor has a high degree of responsibility for detecting fraud.

(n103) Lyon, supra note 93, at 72.

(n104) Id. at 72-73.

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