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:

Actual Partnership

A type of business partnership that exists when two or more individuals engage in a business for profit with an express or implied agreement of partnership, as opposed to being legally deemed partners by the law.

Purported Partner

Implies someone alleged or claimed to be a partner in a business or enterprise, often without the legal or formal acknowledgment of such a partnership.

Substantial Reliance

A level of dependence on a promise or statement significant enough to alter one's position, often referenced in contract law.

Detrimental Reliance

A legal concept where a party suffers a loss because they relied on a promise or representation that was later breached or not fulfilled.