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Question: Ultramares Rule. Larkin, Inc., retains Howard Perkins to manage its books and prepare its financial statements. Perkins, a certified public accountant, lives in Indiana and practices there. After twenty years, Perkins has become a bit bored with generally accepted accounting principles and has become creative in his accounting methods. Now, though, Perkins has a problem, as he is being sued by Molly Tucker, one of Larkin's creditors. Tucker alleges that Perkins either knew or should have known that Larkin's financial statements would be distributed to various individuals. Furthermore, she asserts that these financial statements were negligently prepared and seriously inaccurate. What are the consequences of Perkins's failure to adopt generally accepted accounting principles? Under the traditional Ultramares rule, can Tucker recover damages from Perkins? Explain.
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