Asked by Aishah Khalea on May 08, 2024
Verified
Shirley, who is a CPA, fails to discover a fairly obvious error in the books of her client, Banana Computers. If Ben relies on Shirley 's certification of the financial statement in deciding to accept the position of president of the company, Shirley will:
A) in most states be liable to Ben as a third party beneficiary of her contract with Banana.
B) be liable to Ben only if she has a contract with Ben.
C) not be liable if Ben is not a party to the original contract.
D) not be liable to Ben unless Ben notified Shirley in advance of his intention to rely on the financials.
CPA
Certified Public Accountant; a professional designation for accountants who have passed a licensing examination in accounting.
Obvious Error
A mistake made during a transaction or contractual agreement that is clear and undeniable to all parties involved.
Third Party Beneficiary
An individual or entity that is not a direct party to a contract but stands to benefit from its execution or enforcement.
- Gain insight into the norms and accountabilities connected to carelessness and professional behavior within accounting practices.
- Recognize the circumstances in which accountants may face liability towards third parties and comprehend the extent of confidentiality between an accountant and their client.
Verified Answer
Learning Objectives
- Gain insight into the norms and accountabilities connected to carelessness and professional behavior within accounting practices.
- Recognize the circumstances in which accountants may face liability towards third parties and comprehend the extent of confidentiality between an accountant and their client.
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