An Accounting Firm Was Sued for Negligently Preparing a Financial

Multiple Choice

An accounting firm was sued for negligently preparing a financial report for a company. It causes losses to occur and the firm was found to have been negligent in its work. This meant that the firm would likely be:

A) not liable for damages since the problem was negligence, not intentional mistakes
B) responsible for losses not to exceed $1 million, the statutory limit on accountant liability in that state
C) not responsible for damages despite negligence, since reliance could not be shown
D) not responsible for damages despite negligence because of a lack of proximate cause
E) none of the other choices