Asked by Haimanti Bhattacharyya on May 01, 2024
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Under the Restatement test, regarding liability for negligence to third parties, an accountant is liable to known third-party users of the accountant's work product and also to those in the limited class whose reliance on the work the accountant specifically foresaw.
Restatement Test
A guideline used in legal contexts to determine the interpretation or application of laws, often referencing the Restatements of the Law—a series of treatises on various legal subjects.
Liability for Negligence
Legal responsibility for harm caused by failing to act as a reasonable person would, resulting in damage or injury to another.
Third-Party Users
Individuals or entities that are not directly involved in a contract or transaction but who may be affected by it or have rights or obligations arising from it.
- Identify the spectrum of assessments and guidelines employed in evaluating the liability of accountants to third parties.
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Learning Objectives
- Identify the spectrum of assessments and guidelines employed in evaluating the liability of accountants to third parties.
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