Gift Basket Company's liabilities exceed its assets. Gift Basket hires Hill & Dale,an accounting firm,to prepare a balance sheet. Through Hill & Dale's negligent omissions,the sheet shows a net worth. Investment Bank relies on the balance sheet to make a loan to Gift Basket. When Gift Basket defaults,the bank files a suit against Hill & Dale. Under the Restatement (Third)of Torts,Hill & Dale is most likely

Question

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Under the Restatement (Third) of Torts, an accountant may be liable to third parties if they knew that the third party would rely on their work, such as a balance sheet, and the third party suffers a loss due to the accountant's negligence.

Gift Basket Company's Liabilities Exceed Its Assets