The risks auditors face, have increased substantially in the
last few years and continue to do so. They are expected to act as
security officers and to detect errors and crimes.
In a recent judgment by the SCA the main issue before the court
was the liability of an auditor for a negligent misstatement by one
of its employees who had been asked by a buyer of a business to
certify the profit of the business. The auditor certified that
there was a profit when in fact there was none. As a result of the
certification the buyer entered into the transaction and allegedly
incurred wasted expenses. The court found that the misstatement was
grossly negligent and a factual cause of the loss, but was neither
its legal cause nor wrongful.
