The Ultramares Doctrine Is That Ordinary Negligence Is Insufficient for Liability

question 67

Multiple Choice

The Ultramares doctrine is that ordinary negligence is insufficient for liability of auditors to third parties because of the lack of privity of contract between the third party and the auditor.What type of behavior on the part of an auditor would result in liability to more general third parties according to this doctrine?

• A)conducting an audit engagement when a review engagement had been contracted.
• B)completing work in accordance with a contract that was signed with the client.
• C)deliberate misstatement of the financial statements by management remaining undetected.
• D)fraud or constructive fraud with respect to the working papers.

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Definitions:

Civil War

A conflict between factions within the same country, typically over political, social, or territorial disputes.

Women

Adult human females, often discussed in the context of social, political, and economic rights and roles.

Expanded

Refers to something that has been made larger or more extensive.

Traitors

Individuals who betray trust or allegiance typically to their own country.