Marquis Company's liabilities exceed its assets,but the firm's employees falsify its books to reflect a positive net worth.Marquis hires Nan & Ollie,an accounting firm,to prepare a balance sheet,which is certified to show a net worth.Pure Credit Corporation relies on the balance sheet to make a loan to Marquis.When the firm defaults,Pure Credit files a suit against Nan & Ollie.Under the Ultramares rule,the accounting firm is most likely

Question

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Under the Ultramares rule, an accountant is only liable for negligence to those with whom they have privity of contract or a relationship so close as to approach that of privity. Nan & Ollie did not have a direct contractual relationship with Pure Credit, so they cannot be held liable for the loan that Pure Credit made to Marquis. Therefore, choice D is the best answer.

Marquis Company's Liabilities Exceed Its Assets,but the Firm's Employees Falsify