contracted with the accounting firm of cherry 1

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Intercontinental Metals Corp. (IMC) contracted with the accounting firm of Cherry, Bekaert, & Holland to perform an audit. Cherry issued its opinion about IMC, giving all copies of its report directly to the company. IMC later permitted Dun & Bradstreet to examine the statements, and Raritan River Steel Co. saw a report published by Dun & Bradstreet. Relying on the audit, Raritan sold IMC $2.2 million worth of steel on credit, but IMC promptly went bankrupt. Raritan sued Cherry, claiming that IMC was not as sound as Cherry had reported and that the accounting firm had breached its contract with IMC. Comment on Raritan’s suit.

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