Public Accountants' Obligation to Provide Due Professionalism... provide due professional care in all their contractual obligations. The level of fault for which Willis is responsible may vary depending on the circumstances and approaches taken in examining this situation. This fact will be evident when examining this case from the Known User Approach, the Securities Act of 1933 and the Securities Act of 1934. These different options carry different degrees of liability that Willis and Company or any CPA firm can be held liable for. Known User Approach In considering Willis' actions under this known user approach, the New York Court of Appeals set precedent in handling future cases. The New York Court has held that accountants are liable for ordinary negligence only to the accountant's client and specifically identified third parties (Whittington & Pany, 2012). For this to be true, however, it must be clear that the company, in this case Geiger, and the specifically identified third parties are listed as specific users of the audit reports (Whittington & Pany). As regards the loss suffered by bank credit funds on the basis of incorrect balance sheets, the same precedent applies. The bank, as a third party beneficiary, must have been specifically named as a known party in the use of the audit report in order to be entitled to recovery of the loss suffered (Whittington & Pany). The New York Court of Appeals further states that the third party must not only be known or listed in the auditor's report as a user, but said third party must have taken some sort of action to demonstrate the... medium of the document.. ....934 also provides greater protection to auditors as it requires proof of both error and intent to cause harm and reduces liability proportionately. Under the known user approach, auditors can be liable for ordinary negligence, but plaintiffs must be specifically named in the declarations for their allegations to be considered. These three approaches highlight the seriousness with which auditors and accounting firms should approach all established contracts in order to reduce the liability they face in carrying out their public functions. Works Cited Conahan, J., Nolette, P., & Young, A. (2003 ). Securities Fraud. The revision of American criminal law. 40(2). Sal. 1041-1107. ProQuest doi: 230355736.Whittington, R., & Pany, K. (2012). Auditing Standards and Other Safeguards (18th ed.). New York, NY: McGraw-Hill.

Topic > Public Accountants' Obligation to Provide Due Professionalism... provide due professional care in all their contractual obligations. The level of fault for which Willis is responsible may vary depending on the circumstances and approaches taken in examining this situation. This fact will be evident when examining this case from the Known User Approach, the Securities Act of 1933 and the Securities Act of 1934. These different options carry different degrees of liability that Willis and Company or any CPA firm can be held liable for. Known User Approach In considering Willis' actions under this known user approach, the New York Court of Appeals set precedent in handling future cases. The New York Court has held that accountants are liable for ordinary negligence only to the accountant's client and specifically identified third parties (Whittington & Pany, 2012). For this to be true, however, it must be clear that the company, in this case Geiger, and the specifically identified third parties are listed as specific users of the audit reports (Whittington & Pany). As regards the loss suffered by bank credit funds on the basis of incorrect balance sheets, the same precedent applies. The bank, as a third party beneficiary, must have been specifically named as a known party in the use of the audit report in order to be entitled to recovery of the loss suffered (Whittington & Pany). The New York Court of Appeals further states that the third party must not only be known or listed in the auditor's report as a user, but said third party must have taken some sort of action to demonstrate the... medium of the document.. ....934 also provides greater protection to auditors as it requires proof of both error and intent to cause harm and reduces liability proportionately. Under the known user approach, auditors can be liable for ordinary negligence, but plaintiffs must be specifically named in the declarations for their allegations to be considered. These three approaches highlight the seriousness with which auditors and accounting firms should approach all established contracts in order to reduce the liability they face in carrying out their public functions. Works Cited Conahan, J., Nolette, P., & Young, A. (2003 ). Securities Fraud. The revision of American criminal law. 40(2). Sal. 1041-1107. ProQuest doi: 230355736.Whittington, R., & Pany, K. (2012). Auditing Standards and Other Safeguards (18th ed.). New York, NY: McGraw-Hill.