Arthur Andersen LLP v. Superior Court

Opinion

ZEBROWSKI, J.

This writ proceeding concerns an audit of the 1991 financial statements of Cal-American Insurance Company. The audit was performed by the major international accounting firm, Arthur Andersen LLP (AA). AA issued an audit report containing the three typical paragraphs: introductory, scope and opinion. The introductory paragraph identified the financial reports that AA had reviewed: Cal-American’s balance sheet plus “related statements of operations, stockholder’s equity and cash flows.” The scope paragraph identified the level of scrutiny to which these documents had been…