Litigation, Censures, and Fines

Litigation, Censures, and Fines Term Paper example
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Finance & Accounting
Pages 4 (1004 words)
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Why Litigation Happens: A Case of Accounting Firms Name Institution Why Litigation Happens: A Case of Accounting Firms Introduction The accounting firms are operating in the filthiest industry of the world because it is normal for them to face litigation and prostitution every now and then…

Introduction

In recent years auditors are using unqualified comments to warn the companies to take good care of their bookkeeping process but the latter entities are not following the recommendations. The situation got worst with the passage of time and due to this reason public started to challenge the practices of national accounting organizations. Government responded to these challenges by tightening the regulations and ordered the auditors to give qualified objections upon repeated incidents of non-compliance from the companies. Nevertheless the public’s knowledge grew with the help of internet and other modern day technologies that resulted in a significant growth in the number of lawsuits against accounting firms. Recently internet and other technologies compensated for the producer-customer knowledge gap and therefore the organizations cannot fool general public by not following matching principle (Persons, 2011). It is suggested that organizations focus on enhancing their effectiveness and efficiency. But the major question arises that why do litigations happen against the accounting firms? The answer lies within the inability of accounting companies to uphold the accuracy of the financial statements. ...
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