Tuesday, July 24, 2007
New Going Concern Court Decision
The Seventh Circuit recently affirmed dismissal of a suit against Ernst & Young this week in an opinion available here (http://www.ca7.uscourts.gov/fdocs/docs.fwx?submit=rss_sho&shofile=06-3366_020.pdf). EY's audit opinion on the status of its client's financials in FYE 1995 did not did not contain a going concern qualification. And, in fact, EY's client did not go into bankrupcy until 2 years later. The trustee in bankrupcy sued EY on theories of negligence and breach of contract for failing to include a going concern qualification in its opinion.