A case in the Pennsylvania Supreme Court in a case involving PricewaterhouseCoopers could set a precedent for accountant liability.

At the center of the case is the creditor's committee for the bankrupt Allegheny Health, Education and Research Foundation. What we have here is a a group of officers, including the former CFO, who admitted to knowingly misstating AHERF's finances in the figures they provided to PwC in 1996 and 1997.

The question for the court whether the creditor's committee has the right to sue PwC. claiming it knowingly assisting in the AHERF officers' misconduct by issuing clean audit opinions before the company collapsed in bankruptcy in 1998.

PwC won the first round of litigation but a three-judge panel in the 3rd Circuit has thrown that ruling into question, reports Law.com. The judges there say it is too murky an area of law and that they need guidance from the Pennsylvania Supreme Court.

It is hard to see how this one can be clearly resolved. Just further confirmation that accountant liability has turned into a picnic for lawyers.