When an Auditor Is Found Guilty of a Fraudulent Misrepresentation,there

question 10

Multiple Choice

When an auditor is found guilty of a fraudulent misrepresentation,there is liability owed to ________.

• A)third parties with privity and contracted parties
• B)any party that suffered a loss
• C)shareholders only
• D)all parties with privity

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Definitions:

Contract

A legally binding agreement between two or more parties that outlines rights and duties each party is obliged to fulfill.

Duress

A condition wherein a person performs an act as a result of violence, threat, or other pressure against the person.

Non-lawyer

An individual who is not licensed to practice law or offer legal advice.

Undue Influence

An improper or excessive pressure exerted by one person on another in order to coerce that person into a contractual agreement or legal transaction.