An appeals court has overruled $300,000 in penalties levied against accounting firm Grant Thornton in a case involving the firm's audit of the First National Bank of Keystone.
Grant Thornton issued a clean opinion in an audit of the bank's 1997 and 1998 financial statements ordered by the U.S. Office of the Comptroller of the Currency in 1999, but federal regulators discovered that the bank in fact had been insolvent since 1996, according to the Associated Press. Grant Thornton was judged reckless for relying on the bank's verbal statements that it owned $235 million in assets that actually belonged to another bank. However, the appeals court ruling found that because Grant Thornton wasn't part of the bank itself, it could not be held at fault under the law cited by the OCC.
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