Industrial expansion has resulted in the extensive "Use of the corporate device, centralized management of capital and in the growth of credit transactions. In recent years ownership of corporate obligations has become tremendously diffuse as have the patterns of credit relationships. Public accounting, a relatively new profession, bridges the gap between debtor and creditor and the purchaser and seller of securities. The principal function of the public accountant is to prepare statements diagnosing his client's financial status, the client in turn using the statement as a passport for obtaining credit and selling securities. Because accounting requires specialized knowledge, millions of dollars are expended annually in reliance upon the accountant's diagnosis. This article is concerned with liability of an accountant to parties who rely on his negligent misrepresentations of the client's financial status.