“Don’t Surrender Your Privity Shield,” Pennsylvania CPA Journal
“Have you ever considered which classes or categories of persons or entities bring claims of accounting malpractice?” asks Goldberg Segalla Professional Liability partner Jonathan S. Ziss in his latest Pennsylvania CPA Journal column. “Your awareness of who they are and how they succeed can help you steer clear of trouble.”
Here in the latest installment of his “Liability Lessons” column for the Pennsylvania Institute of Certified Public Accountants, Jonathan shows how the 1932 ruling in Ultramares Corp. v. Touche, which became known as the Ultramares or privity doctrine, established privity of contract as the bedrock principle surrounding a CPA’s exposure to negligence claims. “But privity,” he writes, “while it remains an important defensive perimeter, can be breached if a practitioner loses sight of its boundaries.”
Jonathan uses a hypothetical scenario to illustrate how accountants may find themselves in a position referred to as “near privity” and to examine practical steps they can take to avoid such risk.
Read the article here:
- “Don’t Surrender Your Privity Shield,” Pennsylvania CPA Journal, Summer 2016