An investor suing an auditor for not discovering that the financial statements of a company were materially misstated is an example of

Question

Quizplus · Accepted Answer

The scenario describes a third party liability, in which an investor is holding an auditor responsible for not identifying material misstatements in financial statements of a company they have invested in. This is because the investor is not a direct client of the auditor, but rather a third party who has relied on the accuracy of the audit reports.

An Investor Suing an Auditor for Not Discovering That the Financial