Public accountants duty to provide due professional care in all their c

The situation that Willis and Company, certified public accountants have plunge themselves in regarding Geiger Companys claim that Willis was negligent, underscores the need for public accountants to nominate due professional care in all their contractual obligations. The aim of fault that Willis is apt for can vary depending on the circumstances and burn upes taken in examining this situation. This fact will be evident when examining this case from the cognize User come on, the Securities Act of 1933, as well as the Securities Act of 1934. These differing options yield in varying degrees of liability that Willis and Company or any CPA firm can be held accountable for. Known User Approach When considering Williss follow ups under this Known User Approach, the New York Court of Appeals rope the precedent in handling future cases. The New York Court laid that CPAs are held liable for ordinary negligence solely to the CPAs client and specifically identified third parties (Whittington & Pany, 2012). In order for this to be true though, it must(prenominal) be evident that the company, in this instance Geiger and the specifically identified third parties are listed as specific using uprs of the audit reports (Whittington & Pany). In relation to the loss incurred by the bank loaning funds base on misstated financial statements, the same precedent holds true. The bank, as a third-party beneficiary, must have been specifically named as a known party to the use of the auditors report in order to have a claim to recover the loss sustained (Whittington & Pany). The New York Court of Appeals farther states that the third-party must not only be known or listed in the auditors report as a user only when the said third-party must have take some sort of action to prove the ... ...934 also provides a greater protection to auditors as well, because it requires of confirmation of both misstatement and intent to cause harm as well as reduces liability proporti onally. Under the Known User Approach, auditors can be liable for ordinary negligence, but the plaintiffs bringing suit must be specifically named in the statements for their allegations to be considered. These three approaches highlight the seriousness with which auditors and CPA firms should approach all established contracts in order to lessen the liability they mettle in carrying out their public duties. Works CitedConahan, J., Nolette, P., & Young, A. (2003). Securities Fraud. The American Criminal legality Review. 40(2). Ps. 1041-1107. ProQuest doi 230355736.Whittington, R., & Pany, K. (2012). Principles of auditing and other assurances (18th ed.). New York, NY McGraw-Hill.