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) 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. Yes, I know, it's funny. A good laugh is definitely therapeutic, though it's less amusing when you consider that a lower court, apparently on solid legal grounds, actually cited that daft Latin nonsense in tossing the shareholders' suit out of court. It has been used successfully by auditors to defend their nonfeasance in the past, most recently by Grant Thornton in staving off claims from Refco shareholders. Now, I'm not a lawyer so I wouldn't pretend to understand the kind of legal mindset at work here. I agree that, if not overturned, it means that auditors will be handed a "get out of jail free" card when they fail to detect fraud, as a shareholder lawyer put it. But let's put the legal mumbo-jumbo aside and address the underlying issue. It's reached the point, especially if "I don't gotta do nuthin" (as in pari delicto can be colloquially translated) is allowed to stand, that auditors simply have no reason to exist. Public companies might as well fire their high-priced auditors and buy fancy rubber stamps with "auditor" written on them. They'd save a lot of money, and the proceeds can be donated to Haitian relief. If it was just the AIG and Refco cases I wouldn't be so vehement about this. It's just that you can't toss a dart at a double-entry ledger book nowadays without hitting a company that is playing fast and loose with its accounting, with no interference from its auditors.