Which of the Following Is Not Within the Class of Foreseen

question 63

Multiple Choice

Which of the following is not within the class of foreseen users of an accountant's work product?

• A)A prospective shareholder of the client.
• B)A lender bank when the accountant knows only that the client will use the financial statements to obtain a loan from an unspecified source.
• C)A bank when the accountant knows the client will rely on the financial statements as the basis for a loan from the bank.
• D)An investor if the accountant knows that the client is seeking capital from a select group of investors.

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Definitions:

Subprime Mortgage

A type of home loan provided to individuals with poor credit histories, which carries a higher risk of default and higher interest rates.

2008 Financial Crisis

A global financial downturn triggered by the collapse of the housing bubble in the United States, leading to widespread economic contraction, failures of major banks and financial institutions, and significant government interventions.

Housing Bubble

A situation in real estate markets characterized by high demand, low supply, and inflated prices that eventually lead to a sharp decline.

Hurricane Katrina

A devastating Category 5 hurricane that struck the Gulf Coast of the United States in August 2005, especially affecting New Orleans and surrounding areas.