Description: A lawyer friend of mine – who also happens to be a chartered accountant – has told me that roughly every 20 years or so, it seems that the Supreme Court of Canada deals with a case on auditor liability. Well, the 20 years must be up as on February 15, 2017, the Supreme Court is set to hear case 36875 – Deloitte & Touche v. Livent Inc., Through its Special Receiver and Manager Roman Doroniuk. Deloitte has been found liable at a previous trial for over $80 million in damages. The Court’s decision could revisit an earlier 1997 ruling on the Hercules Management case that seemed to vastly reduce the scope of auditor liability.
Date: January 31, 2017;
1) In addition to the Globe and Mail link, search for the Supreme Court of Canada’s website to check out the information on this case. (http://scc-csc.ca/case-dossier/info/sum-som-eng.aspx?cas=36875)
2) Wiley’s Auditing: A Practical Approach discusses the Hercules Management decision. What are some of the main points from this case regarding auditor liability?
3) What decision do you think the Court will make?