The following pertains to auditor legal liability standards under the PSLRA:
a. The Reform Act requires that, in any private securities fraud action in which the plaintiff is alleging a misleading statement or omission on the part of the defendant, "the complaint shall specify each statement alleged to have been misleading, the reason or reasons why the statement is misleading, and, if an allegation regarding the statement or omission is made on information and belief, the complaint shall state with particularity all facts on which that belief is formed."
Do you believe this standard better protects auditors from legal liability than the standards which existed before the PSLRA? Explain.
b. Do you believe the change in standards for auditors' liability under the PSLRA from joint-and-several to proportional liability was a good thing? Explain.