Simean & Co, a Firm of CPA's, Issued an Unqualified

question 33

Essay

Simean & Co, a firm of CPA's, issued an unqualified audit report for its client, Xiing Manufacturing Corporation, a footwear manufacturer in Asia. Xiing Manufacturing, listed its head office in Toronto, Ontario, and its sharwere traded on a Canadian Stock Exchange. Besidthe shareholders, Simean & Co. knew the company was in the process of refinancing a significant bank loan coming due, and the bank was anxious to see the year end results. After an unqualified audit report was issued, the regulator of the stock exchange halted the trading of the sharafter allegations of management fraud came to light. As a result, the share price plummeted and the company went out of business.
Required:
(a) To whom did Simean & Co. owe a duty of care?
(b) What must the bank demonstrate to establish negligence?
(c) What are the defencavailable to Simean & Co?

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Definitions:

Humanistic Therapy

A therapeutic approach that emphasizes personal growth and self-fulfillment through self-discovery and personal responsibility.

Depressed Older Adults

Refers to elderly individuals experiencing symptoms of depression, which may include persistent sadness, loss of interest in activities, and other emotional and physical issues.

Interpersonal Psychotherapy

A time-limited, focused, evidence-based approach to treat mood disorders, emphasizing resolving interpersonal problems and symptomatic recovery.

Medication Treatment

The use of pharmaceutical drugs to alleviate or manage symptoms of mental health disorders, often as part of a comprehensive treatment plan.