The Institute of Chartered Accountants in New Zealand (ICANZ) proposed a policy of proportionate liability to replace the country’s existing “joint and several liability” approach. Why was the proposal denied?
A. Proportionate responsibility for damages cannot be determined objectively.
B. Fairness to the defendants was not relevant to ensuring fairness to the injured party.
C. Large auditing firms would be paying proportionately higher damage awards than small firms.
D. Such a policy is inconsistent with harmonization of international auditing standards.
Answer:B
The Institute of Chartered Accountants in New Zealand (ICANZ) proposed a policy of proportionate liability to replace the country’s existing “joint and several liability” approach. Why was the proposal denied?
A. Proportionate responsibility for damages cannot be determined objectively. B. Fairness to the defendants was not relevant to ensuring fairness to the injured party. C. Large auditing firms would be paying proportionately higher damage awards than small firms. D. Such a policy is inconsistent with harmonization of international auditing standards.