An Accounting Firm Made Serious Errors in Providing Audited Financial

Multiple Choice

An accounting firm made serious errors in providing audited financial statement to ABC Limited. These statements are used by management, shareholders, and potential shareholders.

A) Potential shareholders who relied on these statements may succeed in suing the accounting firm in contract if the accounting firm has not acted according to the reasonable-person standard
B) Potential shareholders who relied on these statements may succeed in suing the accounting firm in negligence if the accounting firm has not acted according to the standard set for accounting firms
C) Potential shareholders who relied on these statements may succeed in suing the accounting firm in contract if the accounting firm has not acted according to the standard set for accounting firms
D) Potential shareholders who relied on these statements may succeed in suing the accounting firm in negligence if the accounting firm has not acted according to the reasonable-person standard