Every now and then, I like to write about a Wall Street institution or practice that stinks, preferably on ice. This time I'm not doing that. The subject of this article hasn't quite risen to that level. To truly stink, there must be some pretense of adding value. No one can reasonably make that claim about corporate auditors.Oh, you think I exaggerate? Then consider for a moment a legal case that is a veritable Vesuvius of precedent in auditor-land, but has drawn little media attention as it has slogged its way through the court system of New York. Shareholders of AIG (AIG - Get Report) are suing the insurer's auditors at PricewaterhouseCoopers, claiming the auditors failed to detect fraud at AIG. New York's Court of Appeals took up this case the other day. PricewaterhouseCoopers traveled up to Albany to put forth a legal doctrine called in pari delicto, meaning "mutual fault." In other words, PricewaterhouseCoopers is free of liability because AIG did the deed. So tough luck for AIG shareholders, lawsuit-wise, the auditors claim.
9 Stocks With Questionable Auditor Oversight - Weiss
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