Under Common Law,which of the Following Statements Most Accurately Reflects

question 30

Multiple Choice

Under common law,which of the following statements most accurately reflects the liability of a CPA who fraudulently gives an opinion on an audit of a client's financial statements?

• A)The CPA is liable only to third parties in privity of contract with the CPA.
• B)The CPA is liable only to known users of the financial statements.
• C)The CPA probably is liable to any person who suffered a loss as a result of the fraud.
• D)The CPA probably is liable to the client even if the client was aware of the fraud and did not rely on the opinion.

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Definitions:

Presentment

The formal presentation of a financial instrument, such as a check, for payment.

Dishonor

The failure to pay or accept a negotiable instrument that has been properly presented.

Notice

A formal declaration or warning of something, often used in legal contexts to inform parties of actions, requirements, or proceedings.

Surrender

The act of giving up something or yielding possession, often under duress or in compliance with a legal requirement.