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Accounting firms should be presumable to pay stockholders if they give a company a lave audit and it goes bankrupt at bottom a yearThe main principle in railroad line line that makes the merged model such a favored business entity is the detail that the crapper itself enjoys a personality that is discipline and distinct from that of the members of the corporation and that of the stockholders . Only in cases where the separate bodied existence of the business has been used to perpetrate prank or been fiction perforate and these separate individuals are made liable(predicate) for the acts of the company . qualification score firms liable to the stockholders for the bankruptcy of a company inviteable to a supposedly clean audit previously issued disregards one and only(a) of the main principles of business and di sregards the corporate fiction that was created by natural virtue . This liability provides the stockholders with the safety net of be able to collect from the erring accounting firm kinda of the corporation who is the literal injured party in this compositors case . If there should be any entity that must be afforded security system , it is the company itself that relied upon the presumptively faulty auditing of the accounting firmHolding accounting firms liable to pay stockholders whenever a company goes bankrupt after the incommode of a clean audit also disregards one of the elements of ascribable process which the law provides to shelter all entities including juridical entities such as corporations and accounting firms .
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The liability here arises from the automatic assertion that accounting firms subscribe fraudulently issued clean audits to the demise of non only the at once bankrupt corporation provided the stockholders as well . This is a presumption that cannot hold immediately and it has been consistently ruled by the Supreme Court that fraud is a serious allegation that must be prove and cannot be assumedWhile there is certainly a need to give new measures to address the trouble of accounting fraud and to protect the stockholders from such acts , the breaking of the law and the business principles that have form the foundation of most , if not all , of the financial proceedings is not the way of doing it . substitute methods such as the notice of a bond in case of fraudulent audits or similar penalties can be explored and perhaps implemented bill Page PAGE 2 of NUMPAGES 2...If you want to get a full essay, order it on our website: Orde rEssay.net

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