The arbitration panel found in favor of the audit firm on all counts in this auditor liability case.
Defense counsel for an accounting firm retained Andrew Richmond of Cornerstone Research in a case involving an audit of a large family-owned construction company. The plaintiffs alleged that the accounting firm failed to detect a long-running fraud orchestrated by the company’s CEO. The plaintiffs claimed substantial damages resulting from the accounting firm’s alleged failure to uncover the fraud.
Mr. Richmond testified at arbitration about the nature of the fraud and concealment schemes and the lack of any causal link between the alleged audit failures and claimed damages.
The arbitration panel found in favor of the audit firm on all counts, including the recovery of costs.