Reviewed by H. F. Stabler Georgia State University

This classic volume was written to provide the practicing ac-countant with a reference to certain judicial opinions and, accordingly, enable him to research the subject without the need to avail himself of a law library. It was the author’s belief that familiarity with the facts and law cited in this work would provide the accountant with a better understanding of professional liability. He believed, also, that knowledge of the past would better enable the accountant to avoid liability in the future. The author indicates that he was prompted to write this volume as a result of interest generated by Chapter 6 of the CPA Handbook, the full text of which is reprinted in slightly rearranged form in the volume under review.

The book is divided into two parts. The first, entitled “An Analytical Survey” contains seven chapters. The second part consists of cases and articles, and is divided into six sections. The judicial opinions in a number of landmark cases are reprinted, many in their entirety. Two articles contained in this section were authored by Levy, and a third by John L. Carey.

The seven chapters in the first part address the traditional topics in the area of professional responsibility: fundamental considerations, liability to clients, liability to third parties at common law, liability to third parties by statute, disciplinary proceedings, working papers and privileged communications. Much of the information contained in these chapters is still relevant. However, some of it is out of date, particularly that found in Chapter Four, “Liability to Third Parties By Statute.” Liability under the Securities Act of 1933 and the Securities Exchange Act of 1934 constitute the core of this chapter. Section 11 (a) and Section 13 of the 1933 Act are discussed, as is Section 18 of the 1934 Act. The author points out that no court cases against accountants had been reported, as of his writing, under the 1933 Act based upon alleged falsity or misleading information as of financial statement dates. The current (1982) reader of this chapter should bear in mind that, due to the almost thirty years elapsing since it was written, the information contained therein is dated. The profession has seen a number of cases during the litigious period since the mid-nineteen sixties. Some of the more recent ones have been brought under Section 10(b) of the 1934 Act. This section is not even discussed in Chapter Four.

Part Two of the book consists primarily of reprints of judicial decisions, presented in the same topic order as are the chapters in Part One. The three articles in this section are commended to the reader.

This outstanding work is a classic in the area of accountants’ pro-fessional liability. It is the intuitive belief of this reviewer that it ranked along with Cooley’s Torts as an authoritative pronouncement. It probably served its intended purpose well for many years but, due to the lapse of time since its publication, the accounting practitioner should today consider it more from the point of view of background material rather than current legal authority. The accountant with a legal problem today is well served to seek counsel immediately. This work should be of considerable interest to historians, both accountants and attorneys. It is a classic.