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COOPERS & LYBRAND CHAIRMAN SAYS AMERICAN TORT SYSTEM IS 'OUT OF CONTROL'

COOPERS & LYBRAND CHAIRMAN SAYS AMERICAN TORT SYSTEM IS 'OUT OF CONTROL'
 NEW YORK, May 20 /PRNewswire/ -- Eugene M. Freedman, chairman of Coopers & Lybrand, today issued the following statement in response to the $338 million award against Price Waterhouse by an Arizona jury.
 "Yesterday's verdict against Price Waterhouse is another example of an American tort system that is out of control and out of touch with economic reality. Unfortunately, we all suffer under a system in which it has become customary to litigate losses from unsuccessful investments. As yesterday's verdict shows, this system is out of balance and badly in need of reform.
 "Coopers & Lybrand fully supports Price Waterhouse, an outstanding and worthy competitor. America's economic system depends on the free flow of reliable financial information and on a solid link between capital sources and the companies that require capital. The accounting profession is a vital cog in that process. Recent huge judgments against accounting firms place the profession at serious risk. In 1991 the major firms spent $477 million in litigation costs, representing 9 percent of the firms' domestic gross revenue from auditing and accounting services. According to a recent study of smaller firms by the California Society of CPAs, only 53 percent of the firms are doing audit work, down from 61 percent as recently as 1988. An AICPA study confirmed that many smaller firms are abandoning auditing and accounting or not accepting clients in some high risk or new industries.
 "Unless steps are taken to reform the system, this pattern will continue and place in jeopardy the American accounting profession, and ultimately, America's economic well-being and competitiveness."
 -0- 5/20/92
 /CONTACT: David L. Nestor of Coopers & Lybrand, 212-536-2965/ CO: Coopers & Lybrand ST: New York IN: SU:


SM-OS -- NY094 -- 2479 05/20/92 16:34 EDT
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Publication:PR Newswire
Date:May 20, 1992
Words:298
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