Opinion ID: 711056
Heading Depth: 4
Heading Rank: 1

Heading: Were Representations of Fact Made by the Audit Opinion Letter?

Text: 95 The essence of Mr. Nash's argument is that an accountant's opinion letter can never give rise to liability for false statement. This premise is simply incorrect and may be rejected out-of-hand. See United States v. Weiner, 578 F.2d 757, 785-86 (9th Cir.) (analyzing defenses to criminal liability for false statements in audits), cert. denied, 439 U.S. 981, 99 S.Ct. 568, 58 L.Ed.2d 651 (1978); United States v. Simon, 425 F.2d 796, 805 (2d Cir.1969) (same), cert. denied, 397 U.S. 1006, 90 S.Ct. 1235, 25 L.Ed.2d 420 (1970). 96 Mr. Nash has likewise failed to demonstrate that the opinion letter prepared by him contained no representations that could be judged false. The audit letter made the following statements: We have audited the accompanying combined balance sheet; [w]e conducted our audit in accordance with generally accepted auditing standards; [w]e believe that our audit provides a reasonable basis for our opinion; [i]n our opinion, the financial statements referred to above present fairly, in all material respects, [Trafalgar's financial status] in conformity with generally accepted accounting principles. Gov't Nash Appendix Vol. I, at 128. Even the last of these statements, which is plainly labeled an opinion, could be considered false if the evidence were to show that Mr. Nash had issued the opinion letter with knowledge that GAAP had not been followed. The remaining statements are even more easily held to an objective standard of falsehood. Construing these statements in the light most favorable to the Government, a reasonable juror could have found them to be representations of fact within the meaning of 18 U.S.C. Sec. 1014. 97