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April 26, 2011

Deloitte US sued for $500m

Deloitte US has been sued for professional malpractice by truck and engine manufacturer Navistar International in a $500million lawsuit.

Navister alleged Deloitte’s ‘bad accounting’ advice forced it to restate nearly three years of results.

In the lawsuit, which was filed in a Chicago court, Navistar said Deloitte US was under pressure from federal regulators and that it “ran away” from accounting advice it had given over the years and from clean audit opinions it issued from 2002 to 2005, according to US news reports.

The lawsuit also accuses the Big Four firm of fraud and negligence.

A Deloitte US spokesperson told the media that Navistar’s claims were false, adding that the firm will defend itself vigorously.

The spokesperson called the lawsuit “an utterly false and reckless attempt to try to shift responsibility for the wrongdoing of Navistar’s own management”.

The lawsuit seeks compensatory damages, punitive damages and other remedies.

In 2006, Navistar broke its 98-year long relationship with Deloitte and hired KPMG US.

Navistar international is listed on the New York Stock Exchange.

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