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This article discusses the consumer issues that CPA’s and CA’s are facing today with the web as a new market medium. Since a website can be created quickly, inexpensively and at almost any location in the world, the consumer may question the very existence of the business. Because of these concerns, the CPA/CA Webtrust, a unique seal of assurance for electronic commerce, was launched. CPA/CA Webtrust is designed to instill confidence in consumers and entities conducting business transactions over the Internet.
A Webtrust seal of assurance is issued by a specially licensed CPA or CA who has been hired by the business website owner to render the Webtrust assurance service. Once a seal is obtained, the entity will be able to continue displaying it on it’s Web site provided the CPA or CA Webtrust provider updates the assurance examination at least once every three months. Consumers will be able to access the website owner’s business policies, and the auditor’s opinion regarding business practice disclosures, transaction integrity, and information protection by clicking on the Webtrust seal of assurance on the web page.
Presently, no reported legal case has addressed the liability of accountants to third parties for disseminating misleading or false financial business information over a computer network such as the Internet. Several significant cases exist, however, which may affect accountant liability to third parties for computer-disseminated false or misleading business or financial information. A starting for an analysis of these cases is a discussion of the case law governing accountants’ liability to non-clients for negligence in the performance of auditing services.
The requirement of strict privity to establish an accountant’s duty to non-clients is the most restrictive standard on the liability continuum. Strict privity requires a contractual agreement (or direct connection) to exist between an accountant or auditor and another party before the latter can have a cause of action for negligence against the accountant or auditor.
Pacini, Carl and Sinason, David. American Business Law Journal, Spring 1 v6 i p47. “Auditor Liability for Electronic Commerce Assurance The CPA/CA Webtrust.” Retrieved September 1, 00, from the World Wide Web http//web5.infotrac-college.com/wadsworth/session/8/56/6654/4!xrn_5_0_A55178
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