In Ultramares v. Touche, Justice Cardozo took a ________ view of which third parties are permissible plaintiffs in actions against accountants.

In the instance of substantial performance, an accountant is entitled to which of the following? 
A. The full amount of the contractually agreed-on fee minus the amount of damages caused by the accountant.
B. The contractually agreed-on fee without any deduction.
C. A reasonable hourly rate.
D. No more than one thousand dollars.
E. Nothing.

If the contract is substantially performed and the breach is therefore immaterial, the accountant may be entitled to the full amount of the contractually agreed-on fee minus the amount of damages caused by the breach.

Which of the following is fraud without fraudulent intent? 
A. Actual fraud
B. Presumed fraud
C. Immaterial fraud
D. Constructive fraud
E. Reliance fraud

Constructive fraud is fraud without fraudulent intent—a plaintiff must prove that the accountant was grossly negligent in performing his or her duties.

When accountants are found liable for fraud, what type of damages may be assessed in addition to compensatory damages? 
A. Punishable
B. Punitive
C. Material
D. Nominal
E. None of the above

Accountants found liable for fraud can be assessed compensatory, as well as punitive, damages.

Which of the following involves accountant liability to third parties based upon privity or near privity? 
A. The Ultramares Rule
B. The Class test
C. The Reliance Rule
D. The Restatement test
E. The Carroll Rule

Third-party liability, as decided by the states, falls into three general groupings, one of which is the privity or near-privity rule known as the Ultramares rule.

Under the _____, an accountant is liable to known third-party users of the accountant's work product and also to those in the limited class whose reliance on the work the accountant specifically foresaw. 
A. Ultramares rule
B. Class test
C. Reliance rule
D. Restatement test
E. Carroll rule

Under the Restatement test, an accountant is liable to known third-party users of the accountant's work product and also to those in the limited class whose reliance on the work the accountant specifically foresaw.

In Ultramares v. Touche, Justice Cardozo took a ________ view of which third parties are permissible plaintiffs in actions against accountants. 
A. Broad
B. Middle of road
C. Narrow
D. Permissive
E. Liberal

In Ultramares v. Touche, Justice Benjamin Cardozo, writing for the highest state court in New York, took a narrow view of which third parties were permissible plaintiffs.

Which of the following is true regarding states adhering to the privity or near privity rule for third party liability of accountants? 
A. All the states utilize it.
B. All states except one utilize it.
C. Three-quarters of the states utilize it.
D. One-half of the states utilize it.
E. Only a few states utilize it.

Only a few states utilize the near-privity, or primary-benefit, test because it is viewed as too restrictive.