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belleej belleej
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6 years ago
Accountant's Liability to Third Parties. Toro Co was a major supplier of equipment and credit to Summit Power Equipment Distributors. Toro required audited reports from Summit to evaluate the distributor's financial condition. Summit supplied Toro with reports prepared by Krouse, Kern & Co, an accounting firm. The reports allegedly contained mistakes and omis-sions regarding Summit's financial condition. According to Toro, it extended and renewed large amounts of credit to Summit in reliance on the audited reports. Summit was unable to repay these amounts, and Toro brought a negligence action against the accounting firm and the indi-vidual accountants. Evidence produced at the trial showed that Krouse knew that the reports it furnished to Summit would be used by Summit to induce Toro to extend credit, but no evidence was produced to show either a contractual relationship between Krouse and Toro or a link be-tween these companies evidencing Krouse's understanding of Toro's actual reliance on the reports. The relevant state law follows the Ultramares rule. What was the result?
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kadoddkadodd
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belleej Author
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6 years ago
Thanks
kevin12323h
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Yesterday
Brilliant ツ
Lourd Jenkins
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2 hours ago
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