Vanderbilt Law Review

Article Title

The Fairness Myth


Any type of fairness doctrine for liability, no matter how superficially if not seductively appealing, would effectively destroy the guarantee of professionalism that the securities law and the ac-counting profession have for so long sought to instill in financial reporting. Without the assurance that accountants are consistently applying those principles that- find general acceptance within the accounting profession, the accountant's opinion will mean nothing to a shareholder, investor, or creditor, unless by some magic he can personally observe the particular "fairness" bias of the individual accountant who performed the audit.51 Instead of enhancing the stature of the accountant's opinion and the utility and comparability of financial statements, a fairness standard would separate these heretofore vital documents from the conventional wisdom of an en-tire profession.Finally, it is unreasonable to expect any professional to operate effectively under such an open-ended standard of care. Indeed, at a time when accountants are already proceeding through a litigation minefield, this additional burden is inappropriate. Fairness, without further definition, means whatever is attractive or unattractive to the particular trier of fact. Such a standard is wholly subjective and unpredictable, varying chaotically according to the predilections, social conscience, and the like, of the various judges and juries who would be called upon to apply it. The fairness doctrine, therefore, is not doctrine but myth-and a dangerous myth at that. One is tempted to suggest that as a standard of liability it is "unfair."