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Kay and Lee Performed an Audit Required for Holligan Industries

Question 64

Multiple Choice

Kay and Lee performed an audit required for Holligan Industries to extend a loan with Second National Bank & Trust. Kay and Lee may be liable for:


A) Second National Bank & Trust declining to extend the loan
B) Ordinary negligence to the bank that loaned money to Holligan because the firm did not discover improper accounting for revenue and assets
C) Gross negligence to the bank that loaned money to Holligan because the firm did not discover improper accounting for receivables and inventory
D) Holligan declaring bankruptcy without a going-concern emphasis of matter

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