- Title
- Implications for third party actions against auditors of recently failed US companies and decision-usefulness objective under the New York Rule
- Creator
- Karan, Ram
- Date
- 2004
- Type
- Text; Journal article
- Identifier
- http://researchonline.federation.edu.au/vital/access/HandleResolver/1959.17/41438
- Identifier
- vital:465
- Identifier
-
https://doi.org/10.1016/j.cpa.2003.05.003
- Identifier
- ISSN:1045-2354
- Abstract
- As the saga of recent corporate collapses in the US unfolds, actions by third parties against the auditors are likely to be brought before the courts, particularly in New York, which is the home of collapses such as Enron and WorldCom and their auditors, Arthur Andersen. Through analysis of cases decided under the New York Rule, this paper elucidates the policy of the courts with respect to auditors' duty of care to non-contractual third parties and the associated decision-usefulness objective of financial reporting. The observed vacillating circumambulation of the courts' policy leaves both auditors' duty of care to third parties and the proclaimed decision-usefulness objective ambivalent, if not dubious, at best. The turbulence caused by the recent corporate collapses may, however, force the courts to re-weigh the interest in freedom of action against the interest in security on the scale of reconstituted social values and perhaps commence another vacillating circumambulation. © 2004 Elsevier Ltd. All rights reserved.; C1
- Publisher
- Elsevier
- Relation
- Critical Perspectives on Accounting Vol. 15, no. 6-7 (2004), p. 927-941
- Rights
- Copyright Elsevier
- Rights
- This metadata is freely available under a CCO license
- Subject
- 1501 Accounting, Auditing and Accountability; Auditors' liability; Decision-usefulness; Enron; New York Rule; Tort; WorldCom
- Reviewed
- Hits: 477
- Visitors: 474
- Downloads: 0
| Thumbnail | File | Description | Size | Format |
|---|