1 Are the SOX rules on consulting services sufficiently strict? Should auditing firms be prohibited from performing any consulting services for companies that they audit?

2 Some argue that investors have unrealistic expectations about what an audit can accomplish, especially at the prices companies are willing to pay their accountants. Critics respond that this view is just another way of saying: Given how much money accounting firms want to earn each year, they may not spend as much time as they should on an audit, especially in a complex situation. Arthur Andersen got in trouble, in part, because of its desire to maintain high levels of profitability. Is there a solution to this dilemma?

3 Under the 1934 Act, accountants are only liable if they act with scienter. Make an argument that they should be liable for negligence. What do you think is the right standard?