The company‘s Act recognizes the auditors responsibilities to: –
i) His client whom he owes a primary duty of care. ii)To third parties under tort of negligence.
iii) Government under criminal law.
Under the law of contract, only persons in a contractual relationship with the auditor can sue
i.e. the client company.
NB:- Individual Shareholders do not have a contract with the auditor hence they cannot sue in contract.
In the tort of negligence, the plaintiff i.e. the third party must prove that:-
a) The defendant (i.e. auditor) owes a duty of care.
b) The defendant has breached the appropriate standard of care i.e. has been negligent
c) The plaintiff has suffered a financial loss as a direct result of the defendants breach
Share through
