Titus,a CPA,certified a client's financial statements because he believed they were correct,on the basis of his use of standard accounting and auditing practices.Later,while doing further work for the same client,Titus discovered information leading him to the conclusion that the financial statements he had certified were false and misleading.Which of the following statements is correct?
A) Titus has a duty of loyalty only to the third parties who must have reasonably relied on the accuracy of those financial statements.
B) Titus can have no liability to anyone if he chooses not to reveal the unreliability of the financial statements,because when he certified them,he had good reason to believe they were accurate.
C) Titus has a duty to disclose the unreliability of the financial statements to anyone he knows is relying on the financial statements.
D) Titus has a duty to inform his client of what he has discovered,but he has no duty to inform any third parties.
Correct Answer:
Verified
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