Given the importance of professional liability to auditors and the negative publicity this creates for the profession as a whole, research a recent case (Post 2000) where an auditor/audit firm was sued for professional negligence. Students may research cases from the UK, USA, NZ or Canada in addition to Australian cases.

Provide a brief description of the key events and the factual issues behind the case

Explain the culpability or which parties were deemed responsible and why. Outline the damages imposed or the penalties and consider whether they were appropriate.

investigate and explain the relevant issues in Auditing and Accounting raised by the case,

The root-cause of the issues such as; market pressure, organisational culture, fraud etc.

any problems, mistakes or misrepresentations made by the defendants, which contributed to the adverse judgement and the awarding of damages,

Finally, provide recommendations and possible improvements to:

o the Audit Strategy,

o the Audit Program,

o Other effective measures;

which would prevent the recurrence of the same litigation in the future and maintain the professional reputation of auditors.