[Unaudited Financial Statements] ABC Company Hires Abe, an Accountant, to Create

question 8

Multiple Choice

[Unaudited financial statements] ABC Company hires Abe, an accountant, to create financial statements. Abe creates the financial statements without using general accounting procedures and clearly marks the statements as "unaudited".
-When does the attorney-client privilege apply to accountants?

• A) Always, because both the accountant and attorney would be paid experts.
• B) Almost always, it depends on what percentage of the work the attorney might see in disclosing information to the accountant.
• C) Never, attorney-client privilege is only between the attorney and the client and can never be extended to the accountant.
• D) Under limited circumstances if the communication between the accountant and the client is made in confidence for the purpose of obtaining legal advice from the attorney.
• E) It depends - a court has to make the determination if there is privity of relationship to extend the privilege.

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Definitions:

Payments

Payments refer to the transfer of money from one party to another in exchange for goods, services, or to fulfill a legal obligation.

Perpetuity

A type of annuity that pays an infinite series of equal payments, with no end.

Regular Payments

Periodic payments made consistently over time, such as monthly mortgage or loan repayments, or dividend payouts to shareholders.

Capitalized

Expenses or costs that are added to the value of an asset and expensed over time through depreciation or amortization, rather than immediately.