KPMG Not Liable To Ex-Client's Buyer: NJ High Court

Law360, New York (February 16, 2012, 4:44 PM EST) -- The New Jersey Supreme Court on Wednesday reversed a decision that found KPMG LLP negligent for failing to detect fraud at a giftware company it audited, holding that the auditor had no duty to Cast Art Industries LLC, a third-party that later purchased the giftware company.

Judge Dorothea Wefing said that KPMG had no liability to pottery company Cast Art for missing the fraud at Papel Giftware Inc. in its audit because the New Jersey Accountant Liability Act would only trigger liability if KPMG knew at...
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