Question

Hark, CPA, negligently failed to follow generally accepted auditing standards in auditing Long Corporation's financial statements. Long's president told Hark that the audited financial statements would be submitted to several, at this point undetermined, banks to obtain financing. Relying on the statements, Third Bank gave Long a loan. Long defaulted on the loan. In jurisdiction applying the Ultramares decision, if Third sues Hark, Hark will:

Answer 1

Answer:

Answered

Explanation:

Hark, failed to generally accept auditing standards auditing  Long's president told Hark that the audited financial statements would be submitted to several, at this point undetermined, banks to obtain financing. Relying on the statements, Third Bank gave Long a loan.

if Third sues Hark, Hark will:

Win because there was no privily of contract between Hark and Third.

This will make Hark the winner if Third tries to sue Hark.