In a Common Law Action Against an Accountant,lack of Privity

question 54

Multiple Choice

In a common law action against an accountant,lack of privity is a viable defense if the plaintiff:

• A)Is the client's creditor who sues the accountant for negligence.
• B)Can prove the presence of gross negligence that amounts to a reckless disregard for the truth.
• C)Is the accountant's client.
• D)Bases the action upon fraud.

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Definitions:

Capital Structure

The mix of different forms of financing used by a company to fund its overall operations and growth, including debt and equity.

Floatation Expenses

The costs associated with issuing new securities in the market, including underwriting, legal, and registration fees.

Book Value

The net value of a company's assets found on its balance sheet, calculated by subtracting liabilities from the total assets.

Market Values

The current prices at which assets, securities, commodities, or services can be bought or sold in a marketplace, emphasizing the plural to encompass a range of values across various markets.