Jim, an accountant, is asked to prepare a statement by Clark. This statement provides details about property owned by Clark. Jim is aware that Clark intends to use this statement to obtain a loan from a bank. Which of the following statements is true of this scenario?

Question

Quizplus · Accepted Answer

The Ultramares Doctrine limits the liability of accountants to third parties, like banks, unless there is privity of contract or a relationship approaching privity. Therefore, in states following this doctrine, the bank cannot sue Jim for malpractice.

Jim, an Accountant, Is Asked to Prepare a Statement by Clark