Question

Discussion Question: What was the dollar amount of the trial court judgment against the accounting firm of Max Rothenberg & Co. in the case 1136 Tenants' Corporation?

1. Do you feel that the judgment was fair?

2. What other implications did the case create for independent accountants?

3. What steps can accountants take to avoid liability for compilations and reviews?

Answer 1

$ 237238.83 was the amount after including interest.

1.I didnot find the judgement fair as it laid whole liability on firm of independent accountant for their disability to detect fraud.

2. Independent accountant became very skeptical in choosing cases as they were fearful of repercussion in case of any negligence by clients and they would have to face the brunt.

3. Accountants can have better audit planning and procedures and a sound process of communication with clients which will help them find & detect frauds and the same could be communicated easily.