Public accountants duty to provide due professional care in all their c

The situation that Willis and Comp some(prenominal), certified public accountants name found themselves in regarding Geiger Companys claim that Willis was negligent, underscores the need for macrocosm accountants to provide due professional care in all their contractual obligations. The level of fault that Willis is liable for can vary depending on the percentage and approaches taken in examining this situation. This fact will be evident when examining this fibre from the Known substance ab user Approach, the Securities run of 1933, as considerably as the Securities Act of 1934. These differing options result in varying degrees of liability that Willis and Company or any certified public accountant firm can be held accountable for. Known User Approach When considering Williss actions under this Known User Approach, the New York chat up of Appeals set the precedent in handling future cases. The New York appeal determined that CPAs are held liable for ordinary negligence s olely to the CPAs client and specifically identified third parties (Whittington & Pany, 2012). In drift for this to be true though, it must be evident that the company, in this showcase Geiger and the specifically identified third parties are listed as specific users of the scrutinise reports (Whittington & Pany). In relation to the loss incurred by the bank loaning silver based on misstated financial statements, the same precedent holds true. The bank, as a third- troupe beneficiary, must pick out been specifically named as a known party to the use of the auditors report in order to have a claim to recover the loss sustained (Whittington & Pany). The New York royal court of Appeals further states that the third-party must not only be known or listed in the auditors report as a user but the said third-party must have take some shape of action to prove the ... ...934 also provides a greater protection to auditors as well, because it requires of proof of both misstatement and intent to cause harm as well as reduces liability proportionally. Under the Known User Approach, auditors can be liable for ordinary negligence, but the plaintiffs bringing suit must be specifically named in the statements for their allegations to be considered. These three approaches highlight the seriousness with which auditors and CPA firms should approach all established contracts in order to lessen the liability they face in carrying out their public duties. Works CitedConahan, J., Nolette, P., & Young, A. (2003). Securities Fraud. The American culpable Law Review. 40(2). Ps. 1041-1107. ProQuest doi 230355736.Whittington, R., & Pany, K. (2012). Principles of auditing and other assurances (18th ed.). New York, NY McGraw-Hill.