Fact Pattern 14-A3 (Questions A16-A17 apply)
Flip,an accountant,certifies an audit for Erstwhile Corporation,Flip's client,knowing that Erstwhile will use the audit to obtain a loan from Deepwater Bank.Flip believes that the audit is true and does not intend to deceive the bank,but does not check the audit before certifying it.
-Refer to Fact Pattern 14-A3.On learning the truth,Deepwater's chief loan officer confronts Flip,who says,"I didn't know." This is
A)a mistake of value.
B)innocent misrepresentation.
C)negligent misrepresentation.
D)unconscionable.

Question

Quizplus · Accepted Answer

Flip's failure to check the audit before certifying it constitutes negligence, which is a form of misrepresentation. Therefore, this is negligent misrepresentation.

Fact Pattern 14-A3 (Questions A16-A17 Apply)