Providing expert witness and expert advisory services in the context of professional negligence actions against auditors and accountants requires the highest standard of technical expertise. At Moore Kingston Smith this is a given, as our experts are relied on by some of the most established legal teams in the field of professional negligence.
Our team of experts have been involved in a wide range of cases involving allegations of negligence against auditors and accountants concerning a broad spectrum corporate entities. We have extensive experience acting for defendant firms and their insurers as well as claimant parties, such as company shareholders and liquidators.
Senior members of our team sit on the Moore Kingston Smith technical committee, which means we are at the forefront of technical changes in the auditing and accounting professions. They are also integral to the management and implementation of the firm’s audit and accounting quality and control procedures.
Case study: action for negligence against a big four firm of auditors
We were instructed by a shareholders action group of a listed hotel group in an action for negligence against a big four firm of auditors. The hotel company had overstated its performance for the purposes of the listing particulars for a new rights issue, on which the audit firm had given a clean certificate.
The CEO had been indicted for fraud and had been committed to prison for issuing fraudulent statements and forging documents. Following investigation of the audit of the company at all relevant dates, we prepared an expert report criticising the performance of the auditors and the audit partner in charge. The matter settled for a substantial sum very shortly after the report was issued to the defendant firm. Additionally, the audit partner resigned from the partnership.
Case study: investigation on behalf of insurers
We were instructed on behalf of the insurers of a firm of accountants facing allegations of negligence in the preparation of the accounts of a company that sold power tools and other equipment. The claimants contended that, as a consequence of the defendant firm’s negligence, the accounts contained errors, the correction of which caused the company’s financiers to lose confidence in the company’s ability to repay its liabilities. The withdrawal of support by the company’s bankers allegedly caused the company to enter into liquidation. Our work involved reviewing the claimant’s letter before action and preparing an expert advisory report to assist the defendants’ advisers with their response.