Incentives to pursue litigation against audit firms
include:
Class action suits and associated user awareness of the
possibilities and rewards of litigation.
Contingent-fee-based compensation for law firms, especially in
class action suits.
A misunderstanding (expectations gap) by some users that an
unqualified audit opinion represents an insurance policy against
investment losses.
Liability doctrines that include joint and several liability
statutes permitting a plaintiff to recover the full amount of a
settlement from an external auditing firm, even though that firm is
found to be only partially responsible for the loss (often referred
to as the deep-pocket theory; i.e., sue those who can pay).