Jim tells his independent accountant,Rachelle,to prepare a financial statement for his business associate,Mel.If Rachelle is negligent in her preparation of this financial statement:

Question

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If Rachelle is negligent in her preparation of a financial statement for Mel, she will be liable if Mel suffers actual financial loss due to her negligence. This is because Rachelle owes a duty of care to Mel as the intended recipient of the financial statement, and if that duty of care is breached leading to actual financial loss, Rachelle will be held liable. Jim may also be held liable if he was aware of Rachelle's negligence and did not take steps to rectify it.

Jim Tells His Independent Accountant,Rachelle,to Prepare a Financial Statement for His