California Fitness

In a Straits Times article on California Fitness, the liquidators said ,in their view, that there was a "fundamental failure" in the conduct of the companies directors, management and auditors to prudently and reasonably assess the veracity of the financial position of the company.

California Fitness had accumulated losses as early as 2013, yet the auditor did not raise red flags. Instead, its financial statements were  prepared on the basis of ongoing concern which assumes the company will remain solvent and operational indefinitely until proven otherwise. The auditor also issued an unqualified opinion despite the company's poor financial standing. Unqualified means no issue with the financial statements and they are true and fair.
California Fitness was still collecting membership fees from 2013 to 2016.

A legal opinion the liquidators obtained said that the auditor had " breached it duty of care to the company" by failing to adhere to auditing

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