An Accounting Firm Made Serious Errors in Providing Audited Financial

question 8

Multiple Choice

An accounting firm made serious errors in providing audited financial statement to ABC Limited. These statements are used by management, shareholders, and potential shareholders.

• A) Potential shareholders who relied on these statements may succeed in suing the accounting firm in contract if the accounting firm has not acted according to the reasonable-person standard
• B) Potential shareholders who relied on these statements may succeed in suing the accounting firm in negligence if the accounting firm has not acted according to the standard set for accounting firms
• C) Potential shareholders who relied on these statements may succeed in suing the accounting firm in contract if the accounting firm has not acted according to the standard set for accounting firms
• D) Potential shareholders who relied on these statements may succeed in suing the accounting firm in negligence if the accounting firm has not acted according to the reasonable-person standard

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Definitions:

Merger

The combination of two or more companies into a single entity, where one survives and the others cease to exist.

Vinzo Pharmaceuticals

A hypothetical or specific company involved in the research, development, and distribution of pharmaceutical products.

Merger

The combination of two or more companies into a single entity, typically with the aim of boosting competitiveness or market share.

Join Forces

To unite or collaborate with others for a common purpose or goal.