Which of the Following Is an Illustration of Liability to Clients

question 105

Multiple Choice

Which of the following is an illustration of liability to clients under common law?

• A) Client sues auditor for not discovering a theft of assets by an employee.
• B) Bank sues auditor for not discovering that borrower's financial statements are misstated.
• C) Combined group of stockholders sue auditor for not discovering materially misstated financial statements.
• D) Federal government prosecutes auditor for knowingly issuing an incorrect audit report.

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Definitions:

Adult Children

Individuals who are legally adults, typically over the age of 18, considered in relation to their parents or parental figures.

Household Labor

Tasks and chores undertaken in managing the functioning of a household, including cleaning, cooking, and maintenance.

Therapy

A process designed to help individuals understand and manage their thoughts, behaviors, and emotions, often involving structured conversations with a trained professional.

Grieving Individual

A person who is experiencing the emotional, physical, psychological, and spiritual responses to loss or death.