It was further determined that an error or negligence in the judgment he exercised should not be attributed to CPA Milner, since he, like the directors, had served as the company's accountant since its inception, and it was not proven that he had any basis to suspect Pinkovich. The trial court also ruled that there was no room for a "going concern" comment regarding the company in 1999, when Statement No. 58 of the Institute of Certified Public Accountants states that a "going concern" note should be made when there is a concern about the continued existence of the audited business, such a concern, so it was held, did not exist in our case. It was further determined that the plaintiffs did not prove the foundations and details of the tort of negligence, and for this reason, too, the lawsuit against the late CPA Milner should be dismissed.
- With regard to the claim against CPA Shaporan, it was determined that the main factor for which he can be held liable towards the company is that he was also the accountant of the subsidiary in the relevant years of the lawsuit. The court emphasized that by virtue of this position, CPA Shaporan was aware of the massive transfers of funds to the subsidiary's account, the transfers of funds from the subsidiary's account to Pinkowitz's private needs, and the poor condition of the subsidiary, in which he required a "going concern" warning.
The evidence shows, it was determined, that CPA Shaporan did not include in the reports for the year 2000 all the real information regarding the company and the subsidiary, and even if these reports included "negative signs and warning signs", they were not sufficient, since an explicit and unequivocal reservation was required, in view of CPA Shaporan's awareness of the situation of the subsidiary even after the end of the financial year to which the report referred (including the massive investments in the subsidiary after December 31, 2000 and until the date of signing the reports in mid-2002).