Accountants’ Common Law Negligence Liability to Third Parties
Willis W. Hagen II, Accountants’ Common Law Negligence Liability to Third Parties, 1988 Colum. Bus. L. Rev. 181
Although the statutory liability of accountants to third parties under the federal securities laws is fairly clear, the scope of accountants’ common law negligence liability varies greatly among the states. This article begins by discussing the historical background of accountants’ common law liability for negligence. The article then presents the recent judicial decisions and rationales for their limitations on accountants’ third party liability. Finally, the article summarizes and analyzes the various judicial positions and supports the application of a traditional proximate causation philosophy to accountants’ negligence liability.
Assistant Professor of Business Law, University of Wisconsin-Oshkosh. B.B.A. 1978, University of Wisconsin-Milwaukee; M.B.A. 1981, University of Wisconsin-Madison; J.D. 1983, Drake University Law School; C.P.A. 1986, Wisconsin. Member of the Wisconsin bar.