A trial lawyer has expressed frustration with
after the network umbrella body secured a seventh postponement to a court
hearing which would decide whether the global body should be held liable in a
$521m (£360m) audit negligence case.
The case was set to go ahead on 17 February, but a Miami judge ruled the case
should be shelved until 26 May after BDO tabled a ‘motion to stay’ the case.
Lawyers believe the case could set a precedent for international networks and
relations with their members around the world.
The issue relates to US firm BDO Seidman’s audit of Bankest, a factoring
company owned by Banco Espirito Santo, a Portuguese bank. Steven Thomas, lead
lawyer for Banco Espirito Santo, said: ‘They have done everything they could to
put off this trial. BDO has brought six different motions to stay the case
before this one.’
Seidman was accused of negligence in its audit after Bankest directors
created fictitious cheques, invoices and companies to inflate the value of
account receivables to support a $170m (£120m) fraud.
The umbrella body has been caught up in the scandal for a second time because
BDO Seidman is appealing against the damages.
A trial judge originally decided BDO International should not be held liable,
but the appeal process has meant that BDO International will have to convince a
jury it should be kept out of the affair. ‘Why should firms get special
treatment? If anything they should be held to higher standards than other
professional services firms,’ said Thomas.
BDO International’s defence has always centred on the fact that the umbrella
body only has 10 employees and the audits conducted by member firms are done
independently. BDO International has said it has no control over its audits and
should therefore not be held responsible.
Jeremy Newman the CEO of BDO International would not comment on the issue.
Two new audit partners have been appointed at the firm BDO in its audit practice following continued growth and investment
Investment in people, tech and businesses impacts on EY's profit per partner figure
If businesses do not take cyber security seriously in their business planning regulators may do it for them, the ICAEW has warned
Dr Richard Willis provides a several thousand-year history lesson of the profession, from origin to modern-day