The foreseen third-party rule states:
A) Auditors can be held liable for damages to plaintiffs even if they are not known to the auditor.
B) The auditor is liable to third parties not normally having privity.
C) The plaintiff does not have to show standing.
D) Both a and b.

Question

Quizplus · Accepted Answer

The foreseen third-party rule states that auditors can be held liable for damages to plaintiffs, even if they are not known to the auditor, and the auditor is liable to third parties not normally having privity, which means a direct contractual relationship or involvement. Therefore, both option A and option B are correct. Option C is not applicable as standing refers to a plaintiff's right to bring a legal claim, which is not specifically related to the foreseen third-party rule.

The Foreseen Third-Party Rule States