Whose loss is it?

Article Abstract:

Accounting firms can be sued for damages only by their corporate clients and not by third-party stockholders. This principle was first applied in the case of Foss v. Harbottle and has since been known as the Foss rule. Under the rule, only corporate entities can claim payments for damages caused by any wrongdoing on the accounting company's part. Individual stockholders who want damage payments must prove that the losses they suffered are distinct from those incurred by the corporation. Three cases in which the Foss rule was applied are cited.

Corporation law

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Foul forecasts

Article Abstract:

Accountants and accounting firms involved in economic forecasting or financial budgeting for companies could be liable for damages if their predictions are far off the mark. This article looks at some of the recent court cases in Canada involving suits against the preparers of economic forecasts for companies to help in determining some rules to avoid liability. Results show that qualifying your data in writing is important and it should include a disclaimer.

Laws, regulations and rules, Accounting firms, Accounting services, Business forecasting

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Not liable

Article Abstract:

Two recent Quebec Superior Court cases dismissed malpractice suits against accountants. In both 'Demers et al. v. Allaire et al.' and 'R.M.A. Restaurant Management Ltd. v. Ronald E. Gallay et al.,' the courts ruled that the accountants could not be held liable because they were expected by their clients to perform tasks different from those they were originally engaged to do. The reasons for the courts' decisions are explained.

Accounting & Auditing Services, Accounting, Tax Preparation, Bookkeeping, and Payroll Services

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