| Author |
|
classiCPA
Newbie
Joined: 24 Apr 2008
Location: United States
Online Status: Offline
Posts: 38
|
| Posted: 21 Jul 2009 at 19:55 | IP Logged
|
|
|
Can someone please clarify for me whether or not a plaintiff must show that he/she relied on a misrepresentation to make a case for a CPA's negligence? It seems to me like some of Becker's questions on this topic indicate that the plaintiff must prove reliance.
However, on page R7-48 of Becker's REG book, it only says the following:
"To make out a case for negligence, the plaintiff must show:
a. The defendant owed a duty of care to the plaintiff;
b. The defendant breached that duty by failing to act with due care;
c. The breach caused plaintiff's injury; and
d. Damages."
There is no mention of having to prove reliance on the CPA's misrepresentation.
I am so confused. Help!
Thanks in advance, and good luck to all of you taking the CPA exams!
__________________
BEC - 80 (05.28.08; Rcvd 06.12.08)
FAR - 65, 78 (2nd: 05.27.09; Rcvd 06.20.09)
REG - 72, 80 (2nd: 07.25.09; Rcvd 08.18.09)
AUD - 70, 82 (2nd: 08.31.09; Rcvd 09.24.09)
|
| Back to Top |
|
| |
bryris
Major Contributor
Joined: 07 Dec 2008
Location: United States
Online Status: Offline
Posts: 624
|
| Posted: 21 Jul 2009 at 20:00 | IP Logged
|
|
|
So how could a misrepresentation cause the injury if the plaintiff never relied on the statements?
Imagine you are a CPA in a courtroom defending yourself. In order for your breach to have caused the injury, the plaintiff needs to have looked at your product and have used the incorrect information to do whatever it is he/she did.
__________________
REG - 97
FAR - 97
BEC - 90
AUD - 97
|
| Back to Top |
|
| |
classiCPA
Newbie
Joined: 24 Apr 2008
Location: United States
Online Status: Offline
Posts: 38
|
| Posted: 24 Jul 2009 at 18:41 | IP Logged
|
|
|
bryris wrote:
So how could a misrepresentation cause the injury if the plaintiff never relied on the statements?
Imagine you are a CPA in a courtroom defending yourself. In order for your breach to have caused the injury, the plaintiff needs to have looked at your product and have used the incorrect information to do whatever it is he/she did.
|
|
|
Hi Bryris,
Thanks a lot for responding to my post. Although I agree with what you said, I asked the question because in a Section 11 case, a plaintiff would have to prove that he/she:
- Acquired the stock
- Suffered a loss
- And the registration statement contained a material misrepresentation or material omission of fact
However, regarding a Section 11 case, the plaintiff does not need to prove reliance on the false statement (Becker p. R7-42). Do you see why I'm not sure about common law negligence now?
Responses from others with any additional insight on this would be greatly appreciated. Thanks!
__________________
BEC - 80 (05.28.08; Rcvd 06.12.08)
FAR - 65, 78 (2nd: 05.27.09; Rcvd 06.20.09)
REG - 72, 80 (2nd: 07.25.09; Rcvd 08.18.09)
AUD - 70, 82 (2nd: 08.31.09; Rcvd 09.24.09)
|
| Back to Top |
|
| |
classiCPA
Newbie
Joined: 24 Apr 2008
Location: United States
Online Status: Offline
Posts: 38
|
| Posted: 25 Jul 2009 at 00:30 | IP Logged
|
|
|
I found the Becker PassMaster question related to this issue:
Question: CPA-04790
"A client suing a CPA for negligence must prove each of the following factors, except:
a. Breach of duty of care
b. Proximate cause
c. Reliance
d. Injury
Answer:
Choice "c" is correct. Negligence has 4 elements: duty of care, breach (which is lack of due care), causality and injury.
Choices "a", "b", and "d" are elements of negligence. Only choice "c" is not."
However, I found that there are other questions that contradict this one. Which is correct? Does the plaintiff have to prove reliance?
I'm still confused... Can anyone answer? I'm taking REG tomorrow... Wish me luck, and good luck to the rest of you!
__________________
BEC - 80 (05.28.08; Rcvd 06.12.08)
FAR - 65, 78 (2nd: 05.27.09; Rcvd 06.20.09)
REG - 72, 80 (2nd: 07.25.09; Rcvd 08.18.09)
AUD - 70, 82 (2nd: 08.31.09; Rcvd 09.24.09)
|
| Back to Top |
|
| |
AG_CPA
Regular
Joined: 19 Jun 2009
Online Status: Offline
Posts: 106
|
| Posted: 29 Jul 2009 at 03:38 | IP Logged
|
|
|
classic cpa/Bryris,
Am stuck with same cofusion as classic cpa mentioned
above, there are contradicting questions (CPA-01465 vs CPA-04790) on becker PM wrt this particular issue. Am
unable to come to a conclusion whether "Reliance" is an
essential element of "Negligence"?
appreciate if anyone could answer
Thanks
__________________
BEC :Passed 5/24/09
REG :Passed 8/28/09 (R)
AUD :Passed 8/24/09
FAR :Passed 11/25/09
Prof Ethics 98% 01/14/10
|
| Back to Top |
|
| |
Active Topics 
Memberlist 
Search 
Help
Register 
Login
Topic: CPA Liability - Common Law Negligence
Topic Closed)
