Court OKs Suit Alleging KPMG Failed To Detect Fraud

Law360 (June 29, 2006, 12:00 AM EDT) -- In the latest blow to KPMG LLP, a court has greenlighted a lawsuit against the Big Four accounting firm brought by shareholders of a fraud-ridden company that lapsed into bankruptcy after KPMG, the company's auditor, failed to perform proper audits.

The New Jersey Supreme Court ruled Wednesday that shareholders of Physician Computer Network, a medical software maker, can sue KPMG, the U.S. unit of Dutch parent firm KPMG International, even though a trial court had previously dismissed the charges.

Between 1993 and 1998, KPMG acted as PCN's independent auditor. During that time, two PCN executives artificially bolstered the company's reported earnings....

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