By: Kacey R. Riccomini
April 24, 2016
Accountants can breathe easier after Mosier v. Stonefield Josephson, Inc., CPAs (9th Cir., Feb. 23, 2016, No. 13-56453) 2016 WL 703104. Recently, the Ninth Circuit Court of Appeals, found that Stonefield, an accounting firm that was hired by PEMGroup and its related entities to audit financial statements, did not cause PEMGroup or its investors’ losses where there was no evidence the company or its investors actually or reasonably relied on the CPAs’ audit report, particularly when PEMGroup’s management defrauded investors and Stonefield issued qualified opinions of PEMGroup’s financial statements. Going forward, the Ninth Circuit’s decision will greatly impact professional liability suits against accountants, among others.