If a Certified Public Accountant Knowingly and Intentionally Performs a Fraudulent

question 44

Multiple Choice

If a certified public accountant knowingly and intentionally performs a fraudulent audit of a company,the accountant will most probably be liable to:

• A) any individual or company that suffered a loss as a result of the fraud.
• B) only the corporation and those third parties who the accountant knew would rely on the audit.
• C) only the corporation and those third parties belonging to the class of intended users of the audit.
• D) only those parties in privity of contract with the accountant.
• E) the corporation, even if the corporation was aware of the fraud and did not rely on the audit results.

---

Definitions:

CDs

Certificates of Deposit, a financial product offered by banks that provides an interest rate premium in exchange for the customer agreeing to leave a lump-sum deposit untouched for a predetermined period.

Price Increase

A rise in the cost of goods or services.

Complements

Goods, such as Pepsi and pizza, that relate in such a way that an increase in the price of one shifts the demand for the other leftward.

Milk

A nutritious liquid produced by mammals, primarily used as a food product for humans.