Asked by Dorthie Brown on Apr 24, 2024
Verified
An accountant who fails to discover every impropriety in a client's books is liable to the client on a negligence theory for any resulting loss.
Negligence Theory
A legal principle asserting that a defendant's failure to exercise reasonable care under the circumstances results in unintentional harm to another party.
Impropriety
Inappropriate or unethical behavior or conduct.
- Determine the essential components needed to prove professional negligence, which include the obligation of care, violation of that duty, and the requirement to demonstrate harm.
- Familiarize oneself with the legal duties imposed on accountants to uncover and inform about any fraud or irregular financial activities in a client's accounts.
Verified Answer
AS
Aysha Siddique6 days ago
Final Answer :
False
Explanation :
An accountant is expected to exercise a reasonable degree of skill and care that is typical of the profession. Failure to discover every impropriety does not automatically constitute negligence unless it can be shown that the accountant did not perform their duties to the standard expected of a reasonably competent professional under similar circumstances.
Learning Objectives
- Determine the essential components needed to prove professional negligence, which include the obligation of care, violation of that duty, and the requirement to demonstrate harm.
- Familiarize oneself with the legal duties imposed on accountants to uncover and inform about any fraud or irregular financial activities in a client's accounts.
Related questions
Because of the Potential for Significant Losses to Sellers and ...
Negligence Cases Against Professionals Often Focus on the Standard of ...
Despite a Professional's Breach of Contract, the Non-Breaching Client Cannot ...
An Auditor Who Accepts a Client's Explanation Regarding Financial Irregularities ...
An Accountant Who Uncovers Suspicious Financial Dealings in a Client's ...