Great State Bank claimed that Wiles Accounting committed fraud in the preparation of an audit.To hold the accounting firm liable,which of the following elements must be established?

Question

Quizplus · Accepted Answer

To establish liability for fraud, it must be proven that the accounting firm knew or had reckless disregard for the truth. A fiduciary relationship or an executed engagement letter may support a claim for negligence, but not necessarily for fraud. Failure to exercise due care may also contribute to negligence but is not a necessary element for fraud.

Great State Bank Claimed That Wiles Accounting Committed Fraud in the Preparation