What Is the Rationale Behind the Restatement Test of Accountant

question 12

Multiple Choice

What is the rationale behind the Restatement Test of accountant liability to third-parties?

• A) The economy will benefit if investors recognize that they have sufficient rights of recovery.
• B) It is only fair to hold accountants liable if they are in privity with a plaintiff.
• C) Much of what accountants do is prepare work for parties that are not their clients and therefore, it makes sense for accountants to owe a duty to intended receivers.
• D) Potential investors should have a route of recovery even if they could not be foreseen by accountants.
• E) The general public should have a route of recovery even if they could not be foreseen by the accountant.

---

Definitions:

Representational Thought

The ability to hold mental representations of objects or events that are not physically present, a crucial component of abstract thinking.

Relations Between Objects

The way in which objects are perceived in relation to each other, assessing attributes like distance, size, or spatial orientation.

Acting Physically

involves using one's body to perform actions or gestures, which can be part of expressive behavior, sports, or theatrical performances.

Sensorimotor Stages

The first of Piaget's stages of cognitive development, where infants learn through interacting with their environment using their senses and motor actions.