An accounting firm that misstated audited financial statements and then concealed the blunder was ordered by the Quebec Court of Appeal to pay more than $300,000 to a shareholder who relied on the statements to acquire a company.
Mallette S.E.N.C.R.L., the sixth largest accounting firm in the province with more than 50 partners and 550 professionals working across 21 offices located in small and mid-sized cities, was held liable for breach of a legal duty after the court found that it was accountable for the loss of future gains the shareholder could have earned. Also held liable were two of the firm’s partners – Gratien Nolet, formerly of Arthur Andersen, who performed the audit from 1999 to 2003, and Marc Dagenais, a tax expert.