Problem

Using the following letters, identify the case to which each statement is most closely rel...

Using the following letters, identify the case to which each statement is most closely related:

1.Established a three-point test for auditor liability, including that auditors demonstrate some action to acknowledge the existence of the third party and the third party’s intent to rely on the opinion and financial statements

     Credit Alliance v. Arthur Andersen 

  ____ 

2.Was the first U.S. case involving a suit against auditors

     Smith v. London Assurance Corp

  ____ 

3.Concluded that reckless misstatements even if not deliberate are the basis for liability to third parties

     Ultramares Corp. v. Touche 

  ____ 

4.Found auditors liable for ordinary negligence under the Securities Act of 1933

     Ernst&Ernst v. Hochfelder 

  ____ 

5.Concluded that auditors had a duty to inform clients of instances of fraud even if hired for write-up work

     1136 TenantsCorp. v. Max Rothenberg&Co

  ____ 

6.Concluded that auditors could be liable to third parties who were not in privity with them

     State Street Trust v. Ernst 

  ____ 

7.Established precedent for the plaintiff to prove scienter to recover damages under section 10(b) of the Securities Exchange Act of 1934

     Escott v. BarChris Construction Corp

  ____ 

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