Question

Niles, an accountant, certifies several audit reports on Optimal Operational Processes, Inc., Niles’s client, knowing that the company intends to use the reports to borrow money from Prime Business Lending Company to buy new equipment. Niles believes that the reports are true and does not intend to deceive Prime Business, but does not check the reports before certifying them. Can Niles be held liable to Prime Business?

Answer 1

Yes ,Niles can be held liable.

Niles is a certified account and an accountant is required to follow the code of conduct in his work. The duty of care and professionalism is one such duty. Nile was not careful in his conduct when he signed the reports without due diligence which in simple terms would be referred to as work negligience. If this negligience causes any loss or damage to even a third party ,prime business in thus case ,he will be liable since it is his negligience that caused the loss.