A federal jury agreed with the Koger stockholders and ordered Deloitte to pay the plaintiffs $81.3 million to compensate them for damages suffered because of the 1989 and 1990 audits. In July 1997,the U.S. Court of Appeals reversed the lower court’s ruling and voided the huge judgment awarded to Koger’s stock holders. The appellate court ruled that the stockholders failed to prove that any errors made by Deloitte during the 1989 and 1990 Koger audits caused the losses they later incurred.
Another of the megafirms created by a merger of two large international accounting firms encountered an independence problem similar to that experienced by Deloitte & Touche in the Koger Properties case However, Pricewaterhouse-Coopers “problem” was much more severe and embarrassing. In 1999, that firm agreed to be the SEC for dozens of alleged violations of the profession’s independence rules.