Which of the Following Statements Is True of Accountants' Liability

question 74

Multiple Choice

Which of the following statements is true of accountants' liability to third parties in breach of contract and fraud cases?

• A) An accountant is liable to a third party for fraud only if the accountant has committed constructive fraud.
• B) An accountant is not liable to a third party for fraud as the accountant is not in privity of contract with the third party.
• C) An accountant is not liable to a third party in breach of contract cases as the accountant is not in privity of contract with the third party.
• D) An accountant is liable to a third party for breach of contract if the accountant willfully refuses to perform the terms of the contract.

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Definitions:

Thoracic Pressure

The pressure within the thoracic cavity, affecting respiratory and cardiovascular functions, influenced by lung volume and diaphragm movement.

Diaphragm

A dome-shaped muscular partition separating the thorax from the abdomen in mammals, playing a major role in breathing.

Intercostal Muscles

Muscles located between the ribs that play a role in the breathing process.

Thoracic Cavity

The part of the body located between the neck and the abdomen that houses organs such as the heart and lungs.