Assignment 2-2 Auditor's Legal Liability to Clients

Assignment 2-2 Auditor's Legal Liability to Clients - of...

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Assignment 2-2 Auditor's Legal Liability to Clients 2-2. What is meant by proportionate liability ? Contrast this legal doctrine with the doctrine of joint and several liability . Proportionate liability is where each defendant is liable solely for the portion of the damages that correspond to the percentage of responsibility of that defendant. Under the doctrine of joint and several liability, each defendant is held fully liable for all assessed damages, regardless of the extent to which they contributed to the injury. 2-3. For what types of actions are auditors liable to a client under common law? Why would the client prefer to sue the auditor for a tort action rather than for a breach of contract? An auditor can be held liable to clients for breach
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Unformatted text preview: of contract, negligence, gross negligence/constructive fraud, and fraud, under common law. A client would prefer to sue an auditor for a tort action because larger amounts for damages can be assessed than for a breach of contract. 2-4. What elements must a client prove to maintain an action against an auditor for negligence? There are four elements required for establishing an auditor's liability for negligence to clients; they include (1) the duty to conform to a required standard of care, (2) failure to act in accordance with that duty, (3) a causal connection between the auditor's negligence and the client's damage, and (4) actual loss or damage to the client....
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This note was uploaded on 02/29/2012 for the course ACCOUNTING 470 taught by Professor Kwong during the Spring '11 term at Franklin.

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