Where shareholders have detrimentally relied on a negligently prepared professional audit to make investment decisions,their only recourse against the professional is their indirect right to bring a derivative action on behalf of the company.

Question

Quizplus · Accepted Answer

Shareholders cannot sue the auditor directly for negligence, but they can bring a derivative action on behalf of the company.

Where Shareholders Have Detrimentally Relied on a Negligently Prepared Professional