when bringing together several underwriting firms in this manner it is necessary to clearly delineate the rights and responsibilities of the parties involved this is accomplished through explicit agreements known as agreements among underwriters or aaus which lay out which underwriter is responsible for which portion of the new issuance 
the western account also known as a divided account is simply one common example of an aau structure in it each underwriter agrees to take on liability for only the portion of the issuance that it takes into its own inventory if any of the securities held by other underwriters fail to sell or obtain disappointing prices then that risk is only borne by the specific underwriter left holding that inventory example of a western accountxyz corporation is a prominent manufacturing company preparing for its ipo its management team are experts in their industry but are not especially knowledgeable about the financial markets for this reason they hire a lead underwriter who in turn forms a consortium of firms who are collectively responsible for carrying out xyz s ipo under the terms of this transaction xyz is paid a sum by the underwriters that is equivalent to 25 per share in order to profit from the transaction the underwriting consortium needs to sell its shares to other investors for greater than 25 per share in forming their consortium xyz s underwriters adopted an aau modeled on the western account structure accordingly each of the underwriting firms involved only assumed responsibility for a specific portion of the newly issued shares for this reason the ultimate profit or loss of the underwriters will vary from one firm to the next 