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  1. Good morning, everyone.
  2. My name is Gordon, and today I'll be doing my
  3. presentation on account and order it.
  4. So in terms of the structure of this presentation, first
  5. order a quick look at the tutorial scenario.
  6. Then we'll find out what case will bear a phone
  7. to throughout the presentation.
  8. And I also highlight some relevant facts about the case
  9. offered. I will take a look at what legal issues
  10. we found in our case, and we will apply the
  11. Lord to our tutorial question and based on all of
  12. that, will come to some sort of conclusion.
  13. So let's start right into dictatorial.
  14. This is us in our area.
  15. Essentially, Owasi consulted a accountants to perform in order it
  16. that were used for negotiation off alone with East Bank.
  17. Essentially, East Bank refused alone, and then the order was
  18. used by LSC to obtain alone from easy money.
  19. So what's the big question in the big question here
  20. is, should easy money rely on the order conducted by
  21. a A accountants.
  22. Now, keep in mind that what it wasn't actually prepared
  23. with easy money in mind.
  24. So hold on to that door and we'll come back
  25. to it later on in the presentation, Let's take a
  26. look at what case will be using, so we'll be
  27. using the A Sandal Finance Corporation LTD.
  28. And Pete Maverick Honda for Hunger.
  29. Ford's case.
  30. Um, let's look at some background information about the case,
  31. essentially a sandal.
  32. Lend some money to excel, and it did so after
  33. reviewing and relying on its order tit accounts prepared by
  34. PMH PMH audited financial records actually breached mandatory accounting standards.
  35. Eventually excell Depot to the company and its sand us.
  36. So to recover the losses from the orderto, they argued
  37. that P N h er them a Julia care says
  38. the preparation of the order report was negligent.
  39. So let's take a look at the key legal issues.
  40. Um, the Q B will issue here is how far
  41. does the duty of care extend in relationship their parties
  42. Now hold on to that.
  43. First, let's take a look at or it is.
  44. Orders are usually liable under the tort of negligence, which
  45. is essentially failure to use reasonable care and skill in
  46. the conduct of the order, it and the preparation off
  47. order reports coops over back and duty of care.
  48. So in this scenario PMH could not have forcing.
  49. That is sand.
  50. I would use the order to certificate right.
  51. And as I said earlier, the order certificate was not
  52. prepared with easy money in mind and therefore there was
  53. no duty of care established between the two parties.
  54. And that's why on my 18th of March 1997 the
  55. High Court of Australia decided to favour peonage.
  56. So let's apply this law to Odditorium.
  57. Question. So the quotes decision gives President for the argument
  58. that an entity providing advisory service is like order.
  59. It is, does Noah.
  60. Their party's a duty of care unless forcing.
  61. So let's get right into Judy of care now.
  62. As I said earlier, a accountants were consulted by Oh,
  63. I see to prepare order reports that would be used
  64. for negotiation off alone from East Bank.
  65. So while a accountant would have owed a duty of
  66. care to O.
  67. R. C.
  68. And to be spank, they could no have four saying
  69. that the order will be used by easy money to
  70. grant alone TOC.
  71. So because of this, there was no duty of K
  72. established between the two parties.
  73. Next thing when you look at is vulnerability.
  74. Now this is also important.
  75. And this was also seen in the sand a case
  76. since both the Sandar and Easy money are large corporations,
  77. and they have enough funds to make their own enquiries
  78. instead of solely relying on order reports.
  79. So they have enough funds to actually make their own
  80. enquiries before making any investment decisions, which is the key
  81. thing here and also seeing in the Santa case.
  82. So why's why's he saying the decisions so significant?
  83. Well, it's significant because it shows that auditors should not
  84. be subject to liability in such situations, for it is
  85. to be liable.
  86. They have to have known that the order information will
  87. be communicated to on Relied upon by the third party,
  88. therefore course have restricted the range of people to whom
  89. order to his owe a duty of care.
  90. So where does this leave us?
  91. Sure, easy money rely on the order.
  92. It no easy money should not rely on the audit
  93. by a accountants In their decision to grant Owasi alone.
  94. If they do rely on the orders on, did they
  95. incur monetary damages?
  96. A. Accountants cannot be held liable as we've seen through
  97. the port of negligence and also the Ascender case.
  98. That's it for me.
  99. Thanks for listening, everyone