A privity relationship means that:
A) A party may be a user of the financial statements
B) A party may sue if fraud has taken place
C) A party's financial liability is limited
D) A party has a contractual obligation

Question

Quizplus · Accepted Answer

A privity relationship means that two parties have a contractual obligation to each other. This means that if one party breaches the contract, the other party can sue for damages. It does not necessarily have any impact on a party's financial liability or their ability to use the financial statements.

A Privity Relationship Means That