The Ultramares doctrine is that ordinary negligence is insufficient for liability of auditors to third parties because of the lack of privity of contract between the third party and the auditor.What type of behavior on the part of an auditor would result in liability to more general third parties according to this doctrine?

Question

Quizplus · Accepted Answer

The Ultramares doctrine holds that only intentional or grossly negligent conduct would result in an auditor being liable to third parties, due to the lack of privity of contract between the auditor and the third party. Fraud, or constructive fraud, in the preparation or maintenance of working papers would constitute intentional or grossly negligent conduct, potentially leading to liability to third parties. The other options do not involve intentional or grossly negligent conduct.

The Ultramares Doctrine Is That Ordinary Negligence Is Insufficient for Liability