Just as a reference point, the WSJ carried an article sometime over the last week or so, that pointed out how hard it is to sue the auditors. Legally, it has been argued that auditors work for the board of directors/management, and not the shareholders, therefore, the only people who can take action against them is those same corporate officers (I guess by getting rid of them). In other words, the audit information you get in a quarterly report is just provided out of the good graces of the company, not a binding contract with you as to what has occurred. The audit companies also say that they can't be held to the data's truth, especially if management is willfully falsifying/hiding information. Basically, in that respect, they just check the math, and make sure it's per appropriate accounting standards.
If you have access to the online version of the WSJ, you should be able to find the article with a simple search.
DWB |
