Learning Objectives

Understand the four general stages in the audit-related dispute process.

Know the definitions of key legal terms.

Know the auditor's liability to clients under common law.

Understand the auditor's liability to third parties under common law.

Understand the auditor's legal liability under the Securities Act of 1933.

Understand the auditor's legal liability under the Securities Exchange Act of 1934.

Know how the Private Securities Litigation Reform Act of 1995 and the Securities LitigationUniform Standards Act of 1998 relieve some of the auditor's legal liability.

Understand the auditor's legal liability under the Sarbanes-Oxley Act of 2002.

Know how the SEC and PCAOB can sanction an auditor or audit firm.

Understand how the Foreign Corrupt Practices Act can result in legal liability for auditors.

Understand how the Racketeer Influenced and Corrupt Organizations Act can affect the auditor's legal liability.

Know how an auditor can be held criminally liable for various federal and state laws.

Know and understand the various approaches that the public accounting profession and firms can take to minimize legal liability.