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Auditing & Assurance Services 6th Edition by Timothy Louwers
Edition 6ISBN: 978-0077862343Auditing & Assurance Services 6th Edition by Timothy Louwers
Edition 6ISBN: 978-0077862343 Exercise 12
When creditors who relied on an entity's audited financial statements suffer monetary losses after a customer (the auditors' client) goes bankrupt, what must the plaintiff creditors in a lawsuit for damages show in a court that follows the doctrine in Credit Alliance?
A) The auditors knew and specifically acknowledged identification of the creditors.
B) The auditors could reasonably foresee them as beneficiaries of the audit because entities such as this client use financial statements to obtain credit from vendors.
C) The plaintiffs were foreseen users of the audited financial statements because they were vendors of long standing.
D) All of the above.
A) The auditors knew and specifically acknowledged identification of the creditors.
B) The auditors could reasonably foresee them as beneficiaries of the audit because entities such as this client use financial statements to obtain credit from vendors.
C) The plaintiffs were foreseen users of the audited financial statements because they were vendors of long standing.
D) All of the above.
Explanation
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• The Credit Alliance view holds auditor...
Auditing & Assurance Services 6th Edition by Timothy Louwers
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