Final answer:
The Minority Ultra Mares rule is a doctrine in CPA liability that holds a minority of partners in an accounting firm can bind the entire firm to liability for wrongful acts. This rule is based on joint and several liability and aims to prevent partners from evading accountability.
Step-by-step explanation:
The Minority Ultra Mares rule is a doctrine in the field of professional liability for certified public accountants (CPAs). It states that a minority of the partners in an accounting firm can bind the entire firm to liability for wrongful acts committed in the ordinary course of the partnership's business. This means that even if only a few partners are involved in fraudulent activities, the entire firm can be held responsible for their actions.
For example, let's say there is a CPA firm with five partners. If two of the partners engage in fraudulent activities, the other three partners can still be held liable for the damages caused by the fraud even if they were not involved.
This rule is based on the concept of joint and several liability, which holds that each partner is jointly and severally liable for the acts of the other partners. It is designed to prevent partners from escaping liability by simply claiming ignorance or lack of involvement in the wrongful acts.