Under the Restatement (Second) of Torts, which of the following nonclients may sue an accountant for...
Under the Restatement (Second) of Torts, which of the following nonclients may sue an accountant for professional negligence?
Multiple Choice:
a. A creditor who was not known to the accountant but who used the financial statements for the same purpose as the bank whose use of the statements was known to the accountant.
b. A bank that was not known to the accountant and whose use of the financial statements was not foreseen, but whose use of the financial statements was foreseeable.
c. A securities investor whose use of the financial statements prepared by the accountant to purchase common shares was foreseeable by the accountant.
d. A bank that was known to the accountant but used the financial statements prepared by the accountant for a purpose that was not foreseen.
Homework Answers
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Under the Restatement (Second) of Torts, which of the following nonclients may sue an accountant for...
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Please try to answer all questions.
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1. Which of the following is false regarding common and federal securities laws? a. The securities...
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Tinder the Ultramares rule, an accountant that negligently prepares a client's financial report will be liable to clients and any person or limited foreseeable class of persons who the CPA knows will be relying on the CPA's work. (7) persons in privity of contract with the CPA and intended third parties. 13 clients and any third party that foreseeably relied on the accountant's report. (4) the client only. Yn di or DISCUSSION QUESTIONS AND PROI G.IZOBJECTIVES 5-3,5-4,5-5,5-6) Following are eight...
Please try to answer all questions.
Which of the following is false with regards to audit responsibility? The auditor of a public company is required to certify the annual financial statements. Auditing standards make no distinction between error or fraud; in either case, the auditor must obtain reasonable assuran misstatement. The auditor's responsibility for illegal acts is the same as for errors and fraud. Reasonable assurance is a high, but not absolute, level of assurance. -> Moving to the next...
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