Question

Assume that 500K in damages are awarded to the plaintiff and the CPAs percentage of responsibility is established at 10% while others are responsible of the other 90%. Assume the others have no financial resources. As a result the CPA is required to pay the whole 500,000. The auditors liability is based on what approach?

Answer 1

The auditors liability is based on joint and several liability. Each defendant can be held fully responsible for the entire amount of damages, regardless of their percentage of responsibility.

Step-by-step explanation:

The auditors liability is based on joint and several liability. In this case, the CPAs percentage of responsibility is established at 10% while the others are responsible for the other 90%. Since the others have no financial resources, the CPA is required to pay the whole $500,000 in damages awarded to the plaintiff. Joint and several liability means that each defendant can be held fully responsible for the entire amount of damages, regardless of their percentage of responsibility.