An Entity Not in Privity with an Accountant Is Prohibited

question 32

True/False

An entity not in privity with an accountant is prohibited from recovering against the accountant for malpractice when the accountant had no knowledge of any use that could affect the party.

---

Definitions:

Freight Allowance

A discount or reimbursement provided by a seller to cover or reduce freight costs for the buyer.

Trade Promotion

Marketing efforts directed toward stimulating interest, demand, or purchase of products by end consumers or others in the sales channel, using techniques like discounts, special displays, or sponsorships.

Manufacturer's Warehouse

A storage facility owned or employed by manufacturers for storing their products before distribution.

Self-Regulation

The ability of an individual, organization, or industry to monitor and control its own actions without external intervention, often to maintain standards and avoid negative outcomes.