Which of the following is a correct statement related to CPA legal liability under common law?

Question

Quizplus · Accepted Answer

Under common law, CPAs can be held liable for either ordinary or gross negligence to identified third parties for whose benefit the audit was performed, such as shareholders or creditors. However, CPAs cannot escape all personal liability through incorporation as a limited liability corporation, as they can still be held personally liable for their own negligence or misconduct. Additionally, the statement that CPAs are guilty until they prove they performed the audit with "good faith" is not accurate, as the burden of proof belongs to the party bringing the lawsuit, and not the CPA.

Which of the Following Is a Correct Statement Related to CPA