The Leading Precedent-Setting Case in Third-Party Liability Was a 1931

Multiple Choice

The leading precedent-setting case in third-party liability was a 1931 U.S.case,Ultramares v.Touche.What is the key aspect of this case?

A) To succeed,claimants must be foreseeable users of the audited financial statements that are part of the claim process.
B) Ordinary negligence is insufficient for liability to third parties because of lack of privity of contract.
C) The auditor must have actual knowledge of the users of the financial statements to establish privity.
D) There is no general auditor liability to shareholders,since the loss of equity was suffered by the company.