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One obvious way to deal with liability risks is to avoid them entirely. That’s been the strategy of Ted Jadwin, the general counsel at Trizec Properties, Inc., a Chicago-based real estate investment trust. This spring, Trizec’s accountants at PricewaterhouseCoopers dropped a stack of papers on Jadwin’s desk and demanded that he sign them. The GC started crossing out everything he wouldn’t approve. The surprised auditors then told him that Trizec’s CEO and CFO had already signed off on the entirety of their work, as required by new SEC rules. But Jadwin refused to go along, arguing that he was a lawyer, not an accountant. How could he possibly say his company’s numbers were in compliance with generally accepted accounting principles, when he hardly knew what those principles were? Besides, the GC thought he knew why he was being asking to sign. “The accountants are making it a policy to get other officers at a company to certify, so when [the accountants] get sued, they can turn around and sue the company,” he says. The problem was one that Jadwin says he became aware of in an earlier conversation with his company’s insurers: He doesn’t have the insurance coverage necessary to protect himself against the increased liability. “If there is a mistake, the CFO and the CEO are covered by D&O insurance. I’m not. What if I’m sued?” A partner at PwC, who declined to be identified, confirms that Jadwin’s signature was requested. The partner adds that although the Sarbanes-Oxley Act only requires a CEO and CFO to approve a company’s financial statements, PwC often asks for the GC’s signature too. Though the PwC partner defends the policy as “appropriate,” it seems unnecessary to others in the accounting industry. “I’ve never heard of something like that,” says Bill Bishop, president of The Institute of Internal Auditors, Inc. “That’s ludicrous.” Despite the insistence of PwC’s auditors, Jadwin won the first round. He wasn’t forced to sign by his CEO, and the accountants relented � but only for the time being. They’ve promised a rematch for later this year.

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