Legal Liability(英文版)(ppt 40页)

Legal Liability(英文版)内容提要：
Negligence：
To be held liable, the auditor’s work must be shown as negligent.
Negligence (ordinary) is the lack of reasonable care.
What would a prudent auditor do in the same circumstances.
Following GAAS is not always enough reasonable care
Gross Negligence is the lack of minimum care.
Constructive fraud
Fraud - an intentional act to deceive.
Relationship to Sue for Ordinary Negligence
Privity- party to a contract
Must have privity to sue for breach of contract
Contract between auditor and client
Third Party Beneficiary (standing)
Investors
Creditors
Standing depends on state common law.

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