Problem

While conducting an audit, Larson Associates, CPAs, failed to detect material misstatement...

While conducting an audit, Larson Associates, CPAs, failed to detect material misstatements included in its client’s financial statements. Larson’s unqualified opinion was included with the financial statements in a registration statement and prospectus for a public offering of securities made by the client. Larson knew that its opinion and the financial statements would be used for this purpose. In a suit by a purchaser against Larson, its best defense would be that the

A. Audit was conducted in accordance with generally accepted auditing standards.

B. Client was aware of the misstatements.

C. Purchaser was not in privity of contract with Larson.

D. Larson did not know the identity of the purchaser at the time of the audit.

Step-by-Step Solution

Request Professional Solution

Request Solution!

We need at least 10 more requests to produce the solution.

0 / 10 have requested this problem solution

The more requests, the faster the answer.

Request! (Login Required)


All students who have requested the solution will be notified once they are available.
Add your Solution
Textbook Solutions and Answers Search