Campbell Soup CompanyBackgroundCampbell was founded shortly before the start of the Civil War. Abraham Anderson and Joseph Campbell began making canned vegetables and canned fruits. In 1976, Campbell bought out Anderson's interest and renamed the company the Joseph Campbell Preserving Company. Later, Arthur Dorrance was Campbell's new partner. In the early 1920s, John Dorrance, the nephew of Arthur Dorrance, was the sole owner of the Campbell Soup Company, the largest producer of canned soups. Unfortunately, by the end of the 20th century, the country's appetite for condensed soups was waning. Weakening demand prompted company executives to resort to a range of questionable business practices and accounting systems to improve the company's reported profits. Campbell shareholders filed a series of lawsuits in the late 1990s. The alleged scams included commercial loading, improper accounting of loading discounts, shipping to the job site and guaranteed sales. Plaintiffs in the class action lawsuit filed against Campbell Soup Company and its top executives ultimately added Pricewaterhouse (PwC), Campbell's independent auditor, as a defendant in the case. To enable a suit brought under the Security Act 1934 to proceed against a defendant. , a federal judge must find that the plaintiffs alleged or “pleaded” facts “to support a strong scientific inference” on the part of that defendant. After completing his review of PwC's audit documents, Judge Irenas ruled that the plaintiff's allegations, individually and collectively, did not provide a sufficient basis to justify the inclusion of the accounting firm as a defendant.IssueIn this case, four questions arise... middle of paper......the accounting staff apparently never recorded proper reserves for these sales returns. The plaintiffs accused PwC of knowing about Campbell's false sales, but the judge dismissed that claim. The reason was that PwC's role as Campbell's auditor is insufficient to permit an inference that PwC was aware of these allegedly deceptive practices.SummaryIn addition to learning of these four inappropriate practices, as the complainant, he intends to take legal action against the auditing firms, the evidence to indict them must be sufficient. PwC's auditors may have been careless, but they were not added as defendants. Most of the charges against Campbell were dismissed by the judge simply because the plaintiffs were unable to provide sufficient evidence and specifically highlight the facts. Furthermore, this case shows us a red flag regarding an unusual increase in sales towards the end of the accounting period..