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.

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Definitions:

Duty of Performance

The duty of performance is an obligation in a contract that requires a party to fulfill the terms as agreed.

Reasonable Skill

The level of competence that a professional is expected to perform in a specific task, based on common standards in the field.

Legal Liability

The responsibility to bear the consequences under the law, often involving compensation for harm or damage.

Office Equipment

Machines and devices designed for use in an office environment, such as computers, printers, and telephones.