There are a lot of things that auditors do, because of litigation. One of those things is the development of all of those very detailed standards that everybody is now unhappy about. We first had legislation that said you couldn't hide behind principles because principles were not a basis for defending an auditor because the variation of application under the principles was too broad. Now, we're hearing that as detailed as the standards are, that even complying with those very detailed standards is not adequate defense for the auditor.

So, we're just kind of wondering if there is an adequate defense for the auditor at the end of the day.

Mr. Buffett: I'm curious of the equity and joint and several. I don't know, maybe Bill could educate me a bit on that, as to why the law would recognize that somebody — let's just say that an auditor was one percent at fault, which may not be the case, and the management was ninety-nine percent at fault, and then you can't get at the management's money, so —

Mr. Allen: Right. It's just a Common Law rule that tended to look at the injured person first. And, any degree of participation in causing the injury — the first concern of the law was making the injured person whole first.

And, in these situations, I mean, there is a very good argument that the rule is unbalanced and Congress really has changed it to proportionate, and many states have also changed their laws to proportionate liability, instead of joint and several.

Mr. Buffett: So, it's the problem with joint and several, right?

Mr. Allen: Right.

Mr. Mundheim: Let me give you a suggestion, and see how you react to it.

And the effort here is to see whether you can create incentives for desired behavior on the part of audit firms, without raising the threat of bankruptcy. And, that suggestion has got two parts.

One, greater use of criminal penalties or lifetime publicized bars to deal with individual wrongdoers. Because I think that individuals, one has a sense, don't tend to get caught up in the disciplinary mechanism, at least pubic disciplinary mechanism.