Client not "contributorily negligent" in relying on accountant's skill.Gilbert Wegad, CPA (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000. , was sued by his client, Howard Street Jewelers, Inc., for failure to detect and disclose embezzlement embezzlement, wrongful use, for one's own selfish ends, of the property of another when that property has been legally entrusted to one. Such an act was not larceny at common law because larceny was committed only when property was acquired by a "felonious taking," i. by Howard's cashier CASHIER. An officer of a moneyed institution, who is entitled by virtue of his office to take care of the cash or money of such institution. 2. The cashier of a bank is usually entrusted with all the funds of the bank, its notes, bills, and other choses in . Howard's cash flow problems began in 1983. The cashier's embezzlement was not discovered until 1985. Wegad argued that Howard's damages arose from its failure to act on information it had as early as 1983 that theft was possibly the source of its cash flow problem. The trial court, in instructing the jury, said if the jury found one or more of the plaintiffs guilty of negligence that directly caused Howard's loss, then the jury's verdict must be in favor of the defendant CPA. The jury ruled in favor of Wegad. On appeal, the court ruled the trial court's instruction was in error. The appellate court A court having jurisdiction to review decisions of a trial-level or other lower court. An unsuccessful party in a lawsuit must file an appeal with an appellate court in order to have the decision reviewed. held the jury should have been instructed that Howard justifiably could rely on the accountant's knowledge and skill and that such reliance is not "contributory negligence contributory negligence In law, behaviour that contributes to one's own injury or loss and fails to meet the standard of prudence that one should observe for one's own good. Contributory negligence of the plaintiff is frequently pleaded in defense to a charge of negligence. ," especially since Howard had no reason to suspect the accountant's advice was wrong. This type of instruction recognizes the disparity in knowledge between the accountant and client and the fact the client hires the accountant for that knowledge and is justified in relying on the accountant's skill. The jury's verdict was reversed. |
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