Financial Information Failure: Redrawing the Boundary between Lawyer and Accountant Responsibility

When public firms collapse amid allegations of financial information failure - such as misleading financial statements - society looks beyond the role of accountants to see who else should be held responsible. Increasingly, lawyers advising the firm are charged with responsibility, perhaps because modern financial complexity, as well as rules that make accounting determinations turn in part on legal conclusions, has blurred the boundary between legal and accounting duties. Lawyers should want to satisfy this responsibility not only to avoid liability but also to safeguard their reputation and integrity. The difficult question, which this article attempts to answer, is what that responsibility should be. In that context, this article confronts the larger question: To what extent should non-experts monitor experts on matters of their expertise?