Ailing Company's Liabilities Exceed Its Assets

question 46

Multiple Choice

Ailing Company's liabilities exceed its assets. Ailing hires Brad, an accountant, to certify a balance sheet showing a positive net worth. Credit Bank relies on the balance sheet to make a loan to Ailing. The firm defaults on the loan. Under the Ultramares rule, Brad is most likely not liable because he​

• A) ​did not owe a duty of care to any third party.
• B) ​is not responsible for his client's finances.
• C) ​finished his work before Ailing's loan and default.
• D) ​was not in privity with the bank.

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Definitions:

Dualistic Thinking

This is a cognitive tendency to see situations and issues in black and white, often characterizing options as just right or wrong with no middle ground.

Evolution

The process by which different kinds of living organisms have developed and diversified from earlier forms during the history of the earth.

Creationism

The belief that the universe and life originated from specific acts of divine creation, as opposed to the scientific conclusion that they came about through natural processes.