Legal Question in Business Law in Oregon

Ben, an accountant, certifies several audit reports on Corporate Business, Inc. (CBI), Ben's client, knowing that CBI intends to use the reports to borrow money from Delta Credit Company. Ben believes that the reports are true and does not intend to deceive Delta, but does not check the reports before certifying them. Can Ben be held liable to Delta?

Asked on 12/08/10, 10:22 pm

2 Answers from Attorneys

Kevin B. Murphy Franchise Foundations, APC

0 users found helpful

0 attorneys agreed

As a Franchise Attorney I can say that accounting firms are often sued by third parties who rely on their reports, such as stock investors and buyers of franchises. Whether the third parties prevail or not depends on all surrounding facts and circumstances. You say Ben is an accountant. Is he an employee of a firm or does he have his own accounting practice? Did he know the reports would be used to borrow money? Is he just an accountant or a CPA (where a much higher standard of care applies)? Consult with a good business or franchise attorney in your area for specific advice.

Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.

Franchise Foundations, a Professional Corporation

Answered on 12/14/10, 6:50 am

Mark as helpful