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negligent misstatementeconomic lossauditors
Scott Group Ltd v McFarlane
[1978] 1 NZLR 553
Key Principle
An auditor owes a duty of care in negligence to a third party (such as a takeover bidder) whom the auditor could reasonably foresee would rely on negligently certified company accounts, where the company's circumstances made such reliance a real and foreseeable possibility.
Area of Law
Tort