If an Audit Firm Is Being Sued by a Third

Multiple Choice

If an audit firm is being sued by a third party for common-law fraud based upon a materially false financial report, which of the following is the best defence which the auditors could assert?

A) Lack of a contractual relationship.
B) Contributory negligence on the part of the client.
C) Disclaimer contained in the engagement letter.
D) Lack of causation.