Adders LLP is a limited liability partnership, registered in Ontario, practising as chartered…

Adders LLP is a limited liability
partnership, registered in Ontario, practising as chartered accountants. It has
15 partners and over 200 employees. One of its major clients, Norne Inc., is a
small but dynamic resource company, incorporated in Ontario. Until about two
years ago, the Norne account was supervised by Counter, a senior partner. More
recently, the corporations account has been handled by Turner, a young
accountant who is considered to be in line for a partnership. Counter has
continued to exercise nominal supervision, discussing the account with Turner
from time to time, but

Adders LLP is a limited liability
partnership, registered in Ontario, practising as chartered accountants. It has
15 partners and over 200 employees. One of its major clients, Norne Inc., is a
small but dynamic resource company, incorporated in Ontario. Until about two
years ago, the Norne account was supervised by Counter, a senior partner. More
recently, the corporations account has been handled by Turner, a young
accountant who is considered to be in line for a partnership. Counter has
continued to exercise nominal supervision, discussing the account with Turner
from time to time, but increasingly Turner has been left to work by herself.
Shortly after taking over the account, Turner was approached by Plotter,
Nornes chief financial officer, who outlined to her a scheme to extract large
sums of money from Norne through unauthorized borrowings. Turner would be able
to use her position to falsify the accounts and to conceal the transactions.
Turner agreed, and over the next 18 months they were able to divert over $5
million from Norne before their scheme was discovered. Turner, Plotter, and the
money have all disappeared. Adders LLP is now being sued by Norne Inc. and also
by Driller, an investor resident in British Columbia, who recently purchased a
20 percent share in Norne after examining the accounts prepared by Adders.
Consider the liability of (a) Adders LLP, (b) Counter, and (c) the other
partners in the firm.