Negligence – Accountants Are Liable to Third Parties for Failure to Exercise Reasonable Care

Analyzes the rules on an accountant’s liability to a third party. Generally, an accountant owes a third party the standard of ordinary care that he owes persons with whom he is in privity of contract. However, the author discusses the contradiction between the law that says an accountant does not have to know the third party and the Courts previous rulings that say there is a prerequisite to know the party at the time of a negligent audit.