The ability to reduce sophisticated accounting principles to understandable concepts can make the difference in obtaining a successful resolution of the case. Over the years, our lawyers have clearly demonstrated that ability.
Most of the securities fraud class actions filed allege misrepresentations in financial documents, and are often filed following disclosure of an accounting-based impact on financial results. Issues related to a company's accounting practices and whether those practices comply with generally accepted accounting practices (GAAP) are at the heart of such cases. The specific accounting issues vary, but they include revenue recognition, overstatement of accounts receivable and assets, and understatement of liabilities. Understanding the accounting concepts that underlie these allegations, application of GAAP to the claim, and public company accounting principles can be the key to a successful motion to dismiss, summary judgment argument, or Daubert challenge to plaintiffs’ accounting and damages experts.