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:

Cost Economies

Refers to the reduction in average cost of production as a firm increases its size or volume of output, typically achieved through operational efficiencies.

Product Variety

The assortment or mix of different products that a company offers to its customers.

Homogeneous Preferences

A situation in market analysis where consumers have similar tastes and preferences for goods or services.

Product Variety

Product Variety is the assortment of different goods and services that a company offers to meet consumer preferences and demands.