Mr. Weiss: No, I think what you have to do is recognize that aiders and abetters should be held responsible for investor and employee losses, like we have in Enron. And, second, we should avoid what happens in a lot of these cases, where management comes in — and you can see it in Enron — and takes the position that they relied upon their auditor and they said the auditor said it was okay. And, you don't have the auditor in the case, because you don't have the aiding and abetting liability.

It takes a really egregious, Enron-type situation, to have the auditor in the case. And, I just think that that's wrong.

If there's going to be losses and the auditor is involved in causing those losses, the auditor should be responsible for restoring the money lost by the investor or the employee.

Mr. Mundheim: Should the focus be on compensating the investor, or should the focus be on creating the standards of conduct which are likely to lead to good, honest, competent audits?

Mr. Weiss: Both. But don't —

Mr. Mundheim: Well, some —

Mr. Weiss: Excuse me.

Don't pull a fast one and say we're going to increase the standards a tad bit and have people who are very sophisticated, like Warren Buffett, say I don't think it's going to make too much difference if we have this oversight board, and then take away the remedies and the deterrents of the litigation at the same time.

Mr. Buffett: Bob, I would say that litigation — punishment, which litigation is — is going to modify the aider and publicity will, and conscience will. And the idea of having the proposal I suggested is it weakens the auditor's position if there is litigation. So, in effect, by raising the stakes to the auditor, if will modify behavior in terms of who he's really working for. And that's the goal of it.

And, the auditor who answers those questions accurately will not have a problem with litigation. Maybe occasionally. You can't wipe it out entirely, but they will actually be protected if they do their job under that, and they will be made vulnerable if they don't do their job. And, I think that's quite appropriate.