Business Commons^™

Finding Auditors Liable For Fraud: What The Jury Heard In The Phar Mor Case, David M. Cottrell, Steven M. Glover

Faculty Publications

The Phar Mor case involved a massive collusive fraud by management. Although there were no claims the auditors participated in the fraud, plaintiffs' attorneys were able to convince the jury that the firm was liable for fraud on the grounds it made representations recklessly with regard to GAAS and GAAP.