If a CPA Firm Is Being Sued for Common Law

question 131

Multiple Choice

If a CPA firm is being sued for common law fraud by a third party based upon materially false financial statements,which of the following is the best defense the auditors could assert?

• A) Lack of privity.
• B) Lack of reliance.
• C) A disclaimer contained in the engagement letter.
• D) Contributory negligence on the part of the client.