[Ethics Question] The Enterprise Accounting firm negligentl…
[Ethics Question] The Enterprise Accounting firm negligently prepared audited financial statements for Acme Manufacturing (Acme), which resulted in Acme appearing much more profitable than it actually was. First Trust Bank then made a $500,000 loan to Acme after reviewing the audited financial statements Enterprise Accounting had prepared for Acme. Acme later filed for bankruptcy and had the First Trust Bank loan discharged. First Trust Bank then sued the Enterprise Accounting firm alleging that Acme’s audited financial statements had been negligently prepared. If First Trust Bank is able to prove at trial that Enterprise Accounting firms audited financial statement for Acme were negligently prepared, under the Ultramares case Enterprise would NOT be held liable to First Trust Bank for negligence committed when preparing Acme’s audited financial statements.
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