Sumanthra, an Accountant, Prepared Financial Statements for ZeeTech Ltd

question 92

Multiple Choice

Sumanthra, an accountant, prepared financial statements for ZeeTech Ltd. A cutting edge technology company, ZeeTech was actively seeking private investment in order to finance a new electronics device. Despite the fact that Sumanthra followed 38) Sumanthra, an accountant, prepared financial statements for ZeeTech Ltd. A cutting edge technology company, ZeeTech was actively seeking private investment in order to finance a new electronics device. Despite the fact that Sumanthra followed Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) , the statements she prepared were misleading. Arif and Alena, both potential investors, relied on the statements Sumanthra had prepared. As a result of their reliance, Arif and Alena both invested in ZeeTech and lost a considerable sum of money. Independently, Arif and Alena decided to sue Sumanthra for their financial loss. Which of the following is true? and International Financial Reporting Standards (IFRAccepted Accounting Principles (GAA

• A) Sumanthra will not escape liability because accountants are automatically liable for losses arising from the use of financial statements they prepare.
• B) Sumanthra will not escape liability simply because she followed GAAP and IFRS.
• C) Sumanthra has nothing to worry about, because an accountant who follows GAAP and IFRS could not have breached the standard of care.
• D) Sumanthra has nothing to worry about, because accountants are immune from liability.
• E) Sumanthra has nothing to worry about, because negligence requires proof of more than mere financial loss.

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Definitions:

Femoral Vein

A major vein in the thigh that returns deoxygenated blood to the heart from the lower limbs.

Transverse Scapular Vein

A vein that drains blood from the region around the scapula, crossing horizontally.

Cephalic Vein

A large vein on the outer side of the upper arm, draining blood from the hand and forearm into the shoulder's subclavian vein.

External Jugular Vein

A vein located on the outside of the neck that drains blood from the head, neck, and upper chest into the superior vena cava.