What is a foreseeable user?
Reasonably Foreseeable Users: A minority of courts hold accountants liable to any user whose reliance on the accountant’s report was reasonably foreseeable to the accountant at the time she prepared the report. A purchaser need not prove that she relied on the misstatement or omission to hold the accountant liable.
How can one distinguish the difference between actually foreseen third party users and reasonably foreseeable third party users?
Actually foreseen third party users are a limited range of individuals or organizations that the client intends the information to benefit. Foreseeable third party users are individuals or organizations that the client intends the information to benefit.
What is Rosenblum approach?
Rosenblum (foreseeable user) approach This system holds an auditor liable to all third parties that rely on financial statements.
What is the Ultramares rule?
The Ultramares doctrine holds that ordinary negligence is insufficient for liability to third parties because of lack of privity of contract between the third party and the auditor, unless the third party is a primary beneficiary.
What does the foreseeable mean?
1 : being such as may be reasonably anticipated foreseeable problems foreseeable consequences. 2 : lying within the range for which forecasts are possible in the foreseeable future. Other Words from foreseeable More Example Sentences Learn More About foreseeable.
What does reasonably foreseeable mean in law?
The Curious Case of Reasonable Foreseeability To consider an action negligent and therefore find a party responsible for injury, the act would have to be considered reasonably foreseeable. What this means is that a reasonable person has to be able to predict or expect any harmfulness of their actions.
What is a foreseeable party?
Foreseeable is a concept used in tort law to limit the liability of a party to those acts which carry a risk of foreseeable harm, meaning that a reasonable person would be able to predict or expect the ultimately harmful result of their actions.
What are the differences in liability to third parties under the known user foreseen user and foreseeable user approaches to CPA liability?
The main difference between the Rosenblum (foreseeable user), Ultramares (Known user) and the Restatement (foreseen user) approaches relates to whether the Certified Public Accountant has liability for ordinary negligence to the third parties not particularly acknowledged as users of the CPA’s report.
What is CPA tort?
Consumer Protection Act. In the case of tort, damages are always unliquidated, or unascertained and invariably they are not, and cannot in fact be real. In the case of the CP Act of 1986, the aggrieved consumer is entitled to liquidated damages only, i.e. pre-settled or actual damages.
What are the legal liabilities that a CPA can face?
Accountants are liable for any misstatements that occurred while auditing and preparing financial documents for a client. Because accountants are held responsible for any inaccuracies and as a result can face legal charges or monetary losses, they often take out professional liability insurance.
Which states follow Ultramares?
Judge Cardozo’s ruling became known as the Ultramares doctrine, but it did not settle the issue. Although Ultramares is the basis of law in Florida, Pennsylvania, and to some extent in New York, most states have adopted a broader view.
What was the original decision in the Ultramares case?
The court decided in this case that sufficient intimacy with which privity may be equated means that a third party can sue another’s accountants for negligence (at 115).