Opinion ID: 201697
Heading Depth: 3
Heading Rank: 1

Heading: The PSLRA's Requirement of Clarity and Basis

Text: 124 We first consider whether these claims against PwC meet the PSLRA's requirements for clarity and basis. 125 The claims that PwC falsely asserted compliance with GAAP focuses on the accounting for the allegedly underbid contracts and for the TPPI project. We have already considered substantially the same allegations made against Smith and Langford and found that they pass the PSLRA test for clarity and basis. Because the allegations against PwC are substantially the same for purposes of the clarity-and-basis test, we reach the same conclusion-that the claims against PwC also pass the clarity-and-basis test. 126 The second set of claims against PwC concerns its statements that its audits were performed in accordance with GAAS. To the extent that these claims relate to its failure to discover the alleged deviations from GAAP in the accounting for the underbid contracts and TPPI, we find that they pass the clarity-and-basis test. The other GAAS claims, however, rest on nothing more than a litany of conclusory allegations of failure to conform to various GAAS standards. The Complaint asserts also that PwC missed various red flag warning signs but lacks concreteness as to how the conduct of the audit related to the missed warning signs. See ¶¶ 341, 351. With the exception of the GAAS claims relating to the alleged GAAP violations for TPPI and the underbid contracts, we find the GAAS claims insufficient to pass the clarity-and-basis test of PSLRA.