Law - auditor lawsuits

When corporate fraud occurs, one common target of the victim company is the company's auditors.

The auditors are required by law (the Companies Act) to carry out an annual statutory audit for the benefit of various parties like company shareholders, creditors, lenders, employees and the government.

The auditors' duty is to comment on whether the accounts and financial statements show a true and fair view. If the accounts do not show a true and fair view, then the auditors should qualify their report to either state that a true and fair view is not shown or that the auditors are unable to state whether a true and fair view is shown.

This duty of auditors becomes the source of lawsuits when the accounts are shown to be incorrect. This is even though auditors state that their duties do not include the uncovering of fraud.

For more information about lawsuits against auditors, please see -

http://professionalnegligencesg.blogspot.com/
(professional negligence in Singapore)