On Friday, September 23, 2016, the North Carolina Supreme Court issued its decision in the case of Commscope Credit Union v. Butler & Burke LLP, which reversed the NC Court of Appeals’ former ruling that an auditor might have a fiduciary duty to his or her client. The association has been actively involved in this case for nearly two years and intervened by filing a court brief arguing for reversal, so we are pleased to share this outstanding news for the entire CPA profession.
The NC Supreme Court’s decision states that independent auditors do not owe a fiduciary responsibility to their audit clients, as a matter of either law or fact. The Court clarified that the typical obligations of an auditor under applicable AICPA standards cannot be used to allege a fiduciary relationship. A copy of the Court’s ruling can be found here. After the Court of Appeals’ adverse ruling, NCACPA and the AICPA immediately began working in concert to respond to the case, including the filing of an amicus brief by our legal counsel.
The Association and the AICPA also worked with the following organizations, who also filed briefs:
- Cherry Bekaert, LLP; CliftonLarsonAllen, LLP; and Dixon Hughes Goodman, LLP
- NC Chamber of Commerce
After these briefs were filed in early 2015, the association monitored the case continually, attended court hearings, and provided updates as the case proceeded.