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Accountant's Liability
Walker, the CEO of Memphis Mini Golf and Go Carts (MMGGC), wanted to sell the business to Go Carts, Golf & Games. To provide a basis for the transaction, Walker retained Blanchard, an accountant, to conduct an audit of MMGGC. Blanchard was aware that Go Carts, Golf & Games would likely use the audit report in consideration of the purchase of the business from MMGGC. Blanchard's audit report showed that MMGGC's business was profitable. William, Go Cart's president, relied on this report in agreeing to purchase the business of MMGGC and in agreeing to the terms of the purchase. Sometime later, it was discovered that the accountant made a number of mistakes and that the business that was sold was actually insolvent. William and Go Carts sued Walker and Blanchard for damages. The suit claimed that the accountant had negligently misrepresented the facts.
Question 1: Discuss the arguments for each party, determine which party should win, and provide legal support for your decision.
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