Colordyne Printed Patterns On Carpets After Reviewing The Companys Audited

Color-Dyne printed patterns on carpets. After reviewing the company’s audited financial statements, the plaintiff s provided materials to Color-Dyne on credit. These financial statements showed that Color- Dyne owned $2 million in inventory. The audit failed to reveal, however, that various banks held secured interests in this inventory. The accountant did not know that the company intended to give the financial statements to plaintiff s or any other creditors. Color-Dyne went bankrupt. Is the accountant liable to plaintiffs?

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