Gregory & Hedrick, a Medium-Sized CPA Firm, Employed Elise as a Staff

Gregory & Hedrick, a medium-sized CPA firm, employed Elise as a staff accountant. Elise was negligent while auditing several of the firm's clients. Under these circumstances, which of the following statements is true?

A) Elise would have no personal liability for negligence.
B) Gregory & Hedrick is not liable for Elise's negligence because CPAs are generally considered to be independent contractors.
C) Gregory & Hedrick would not be liable for Elise's negligence if Winters disobeyed specific instructions in the performance of the audits.
D) Gregory & Hedrick can recover against its insurer on its malpractice policy even if one of the partners was also negligent in reviewing Elise's work.

Correct Answer:

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