When Creditors Who Relied on an Entity's Audited Financial Statements

question 59

Multiple Choice

When creditors who relied on an entity's audited financial statements suffer monetary losses after a customer (the auditors' client) goes bankrupt,what must the plaintiff creditors in a lawsuit for damages show in a court that follows the doctrine in Credit Alliance?

• A) The auditors knew and specifically acknowledged identification of the creditors.
• B) The auditors could reasonably foresee them as beneficiaries of the audit because entities such as this client use financial statements to obtain credit from vendors.
• C) The plaintiffs were foreseen users of the audited financial statements because they were vendors of long standing.
• D) All of the above.