Under Common Law,which of the Following Statements Most Accurately Reflects

question 30

Multiple Choice

Under common law,which of the following statements most accurately reflects the liability of a CPA who fraudulently gives an opinion on an audit of a client's financial statements?

• A)The CPA is liable only to third parties in privity of contract with the CPA.
• B)The CPA is liable only to known users of the financial statements.
• C)The CPA probably is liable to any person who suffered a loss as a result of the fraud.
• D)The CPA probably is liable to the client even if the client was aware of the fraud and did not rely on the opinion.

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Definitions:

Efficiently

Performing or functioning in the best possible manner with the least waste of time and effort.

Economies of Scale

The cost advantage achieved by businesses when production becomes efficient, as the scale of operation increases leading to a reduction in average costs.

Positive Economic Profits

Earnings that exceed the total costs, including both the explicit and implicit costs of a business.

Expand

To increase the scale, scope, or size of something, often used in the context of business growth or economic expansion.