The U.S. Court of Appeals for the Sixth Circuit has referred questions to the Pennsylvania Supreme Court in a case involving PricewaterhouseCoopers that could set a precedent for accountant liability.
The case revolves around the creditor's committee for the bankrupt Allegheny Health, Education and Research Foundation. A group of officers, including the former CFO, admitted to knowingly misstating AHERF's finances in the figures they provided to PwC in 1996 and 1997. The court needed to decide whether the creditor's committee has the right to sue PwC for knowingly assisting in the AHERF officers' misconduct by issuing clean audit opinions before the company collapsed in bankruptcy in 1998. PwC won the first round of litigation in a lower court, according to Law.com.
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