Ready and Co, a firm of accountants and auditors, were engaged to prepare the ac
ID: 349779 • Letter: R
Question
Ready and Co, a firm of accountants and auditors, were engaged to prepare the accounts and balance sheet for Products for People plc, knowing the accounts were to be sent to Hind, a private investor, who was thinking of buying shares in Products for People plc The accounts were negligenty prepared and showed the company as financially stabe, even though the opposite was true and the company had large unpaid debts Hind showed the accounts her friend Imran. Hind bought AED1 million worth of shares and Imran bought AED 500,000 worth of shares. Within 6 mornths, Products for People plc wentinto liquidaton and both Hind and Imran losttheirinvestments. Advise () Hind and 2) Iman whether they are kely to be successful in ther daims in Whatare the 3 points to be proved in any claim based on negligence? . Whatdoes What mustbe proved in a claim for'negligent misstatement? Would Hind be successful in a claim for 'negigernt misstatement against Ready and Co? Would Imran be successful in a claim for negligent miss tatement against Ready and Co? es pure economicloss meen and when can a caim be made forit? Would Ready and Co haveany defences?Explanation / Answer
-The three points to be proved are duty, breach and causation.
-Pure economic loss is the financial damage suffered by any partie(s) due to negligence of another partie(s). Through tort claim can be made.When negligence is proved then only one can claim through tort.
- In negligent misstatment it should be proved that pure economic loss is not accompanied by any physical damage to a person or property.
-By following the tort act Hind can be successful,
- Imran can also be successful
- Ready and Co. have not solid defence to prove that they are innocent.
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