In view of the aforesaid, the plaintiffs requested that CPA Milner be charged jointly and severally with the directors and the insurer for the full amount of the claim.
In his response, CPA Milner reiterated his arguments as claimed in the trial court, and relied on the court's rulings that led to the dismissal of the lawsuit against him.
E.2.3. Discussion and Decision
- At the outset, it should be noted that I do not share the conclusion of the trial court regarding the dismissal of the claim against CPA Milner, only because of the implied agreement attributed to the shareholders regarding the non-consolidation of the company's reports with the subsidiary. First, even if Milner acted this way throughout his years as the company's accountant, he should have paid attention to the change in circumstances in the years relevant to the lawsuit, and especially to the dramatic change in the scope of money transfers from the company to the subsidiary (in 1998, ILS 376,187 was transferred from the company to the subsidiary, and in 1999 ILS 1,443,771 was transferred from the company to the subsidiary). The subsidiary's losses also increased by more than ILS 2 million in 1999 compared to 1998). This change in circumstances required a reconsideration and additional exercise of discretion with respect to the question of the consolidation of the reports, and it is not possible to rely on "tacit consent" or the practice that characterized Milner's pattern of action until this year as a basis for rejecting the claim. Second, and as already noted above, the shareholders should not be identified with the company, which has a separate legal personality. The company's claim and the claim of the operating manager, CPA Derman, were standing on their feet, even if there was room for a "judicial estoppel" against the shareholders (and as stated, contrary to the position of the trial court, I do not believe that in the circumstances there is room for such an estoppel).
- I also do not share the trial court's determination that since CPA Milner, like the directors, also served as the company's accountant since its inception, he had no basis to suspect Pinkowitz or his actions (see paragraph 206 of the trial judgment). The role of an auditor of a company, as well as the role of directors, is to be a supervisory and auditing factor towards the company's officers and organs. The fact that a person has held a supervisory or supervisory position for many years, and that during his term of office no irregularities or prohibited actions were discovered by any of the officers of the corporation, does not in itself justify ignoring clear warning signs (such as the change described in investments in the subsidiary between 1998 and 1999) or a decrease in the required supervisory or critical standards. The obligation of the accountant to thoroughly investigate and examine the company's situation and the information presented in the financial statements This court has met on various occasions:
"The role of the accountant should not be reduced to someone who mechanically checks references and makes arithmetic calculations. He should not be treated as an author and a lack of professionalism. Its main role is to make sure that no mistakes are made whether they stem from a calculation, or from any acts or omissions, or of course from false acts. In order to carry out this role, he must approach the work with an inquisitive mind, not necessarily a suspicious one, if he encounters a legal question while carrying out the audit, then he must investigate it and enter into its depths, and if necessary, even disqualify the action" (Criminal Appeal 2910/94 Yefet v. State of Israel, IsrSC 50(2) 221, 445-446 (1996), emphases added, Z.Z.)