Question
In: Accounting
harold ford is the only general partner at the accounting firm, ford & partner, L.p. Lindsey...
harold ford is the only general partner at the accounting firm, ford & partner, L.p. Lindsey another partner at the firm, negligently enter incorrect information in a client,s financial statement and causes the client to lose an important contract that was worth 7 million dollars. the client sues the negligent. question a0 will judge hold the firm liable for lindsey,s negligence? give a reasons for your answer.
b) if the judgement in the favour of client how much Harold have to pay? and reason.
c) if the judgement in the favour of client how much lindsey has to pay? and reason
Solutions
Expert Solution
1. The ford & partner is the accounting firm that has accounting work of Harold ford, so it was a consultant to the company and acts as an agent under the Principle-Agency. Therefore, the judge would hold the firm liable for Lindsey’s negligence which causes ford to loss the contract.
2. Harold being the only general partner of the accounting firm, so it is his prime responsibility to let the correct financial statement passes through. So, Harold and the accounting firm has to reimburse the ford fully for the loss.
3. The Lindsey is the prime culprit of the mistake in financial statement, so Lindsey has to pay towards the lose as per the partnership agreement terms of lose sharing.
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