Auditors of publicly registered companies are all too familiar with being named in litigation filed after the collapse of a financial institution or other organization. They are also aware that, following a company's failure or a restatement of its financials, regulators at the SEC and PCAOB will often focus on whether the auditors complied with GAAS and GAAP. But what is the extent of their liability in the current environment? In the past, the Big 4 and other smaller firms faced suits in an environment that was increasingly hostile to holding third parties, like lawyers and accountants, responsible for fraud that may have occurred at their clients. Without the evidence of some form of complicity in the fraud, auditors have often been able to avoid regulatory actions and, in the case of private litigation, convince the courts to dismiss them at an early stage. However, given the breadth and depth of the credit crisis, many are asking why these audit firms did not see early warning signs that their clients were insolvent? The SEC and PCAOB are also focusing significant attention on audits of failed or failing companies. And private litigants are reacting by commencing litigation and by pursuing litigation strategies that have the potential to expand the scope of auditor liability.
At this program, a distinguished panel of experts will dissect where there is exposure for auditors, the kinds of cases that the SEC Division of Enforcement and PCAOB are pursuing, and current developments in private litigation, including issues relating to member firms in international organizations in light of the recent In re Parmalat decision.
Topics to be discussed include:
- What are the SEC and PCAOB up to?
- When can auditors be deemed to be participants in a fraud?
- Under what circumstances may auditors incur liability?
- What issues affect class actions by investors in audit clients?
- What are U.S. and foreign firms doing when the SEC investigates conduct crossing international borders?
- How are audit firms defending themselves against claims of behalf of bankrupt estates?
Richard J. Morvillo, partner in Mayer Brown's Washington, DC office, will moderate several panel presentations. Brian J. Massengill, partner in the Chicago Office, will serve as a panelist. For more information and to register, please visit www.pli.edu.
CLE Credits Available.