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POB issues special report on liability and financial reporting reform.

The Public Oversight Board (POB), an autonomous body that oversees the activities of the AICPA division for CPA firms SEC practice section, has issued a comprehensive special report, In the Public Interest. The special report calls for congressional action to limit the liability exposure of the accounting profession and recommends a number of reforms in accounting and auditing practices, such as expanding audit committee responsibilities and requiring all Securities and Exchange Commission registrants to disclose whether their auditors have had peer reviews.

The AICPA said the POB recommendations for restoring confidence in financial reporting and the audit process are consistent with Institute efforts to achieve, these critical objectives. AICPA President Philip B. Chenok said, "Finding an appropriate balance between auditor responsibility and auditor liability is the number one challenge facing the profession today."

The Institute also endorsed the POB's recommendations for liability legislation providing for "separate and proportionate" damage determinations in both federal and state claims. Under such determinations, the trier of fact determines the proportion of loss caused by each defendant and allocates damages accordingly.
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Title Annotation:Public Oversight Board
Publication:Journal of Accountancy
Article Type:Brief Article
Date:May 1, 1993
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