Select the best answer for each of the following question and explain the reasons for you choice.

a. If a CPA performs an audit recklessly, the CPA will be liable to third parties who were unknown and not foreseeable to the CPA for:

Strict liability for all damages incurred,

Gross negligence, either ordinary or gross negligence,

Breach of contract.

b. Which of the following approaches to auditors' liability is least desirable from the CPA's perspective?

The Ultramares approach.

The Rosenblum approach.

The Restatement of Torts approach.

The Foreseen User approach.

c. In cases of breach of contract, plaintiffs generally have to prove all of the following, except:

The CPAs had a duty.

The CPAs made a false statement.

The client incurred losses related to the CPAs' performance.

The CPAs breached their duty.

d. If the CPAs provided negligent tax advice to a public company, the client would bring suit under:

The Securities Act of 1933.

The Securities Exchange Act of 1934.

The federal income tax law.

Common law.