CPAs in public practice are required to adhere to strict rules pertaining to client confidentiality. In general, client permission must be obtained before the CPA releases any confidential information. Which of the scenarios below best represents a viable exception to the client confidentiality rules? An important issue, and one of major concern to an external auditor and CPA firm is legal liability. The CPA firm may have to contend with litigation and must be prepared to respond accordingly. Which of the following most accurately describes an auditor's potential liability under common law? Under common law, an auditor may be liable to clients under either common law or tort law, but the auditor is not liable to third parties. Under common law doctrines and precedents, the auditor does not assume any liability for audit and attest engagements. The liability is solely the clients. Common law makes the auditor liable under either contract or tort law, and may also make the auditor liable to foreseen and foreseeable third parties. Under common law, an auditor may be liable to other beneficiaries, which represent a foreseen class of third parties. The partners of Mayfair CPAs are meeting to discuss the upcoming audit of an ongoing, major audit client. The client has recently replaced some key executive positions, as due to an economic downturn, demand has slackened and profitability issues are becoming a concern. Based on this information, what would be the audit firms' best course of action? Advise the client that because of the increased inherent risk associated with high management turnover and weak demand, the audit firm will no longer be able to perform attestation services. Consider performing the audit, but consider focusing audit time and resources on areas such as revenue that may now have a higher risk of material misstatement. Advise the client that Mayfair CPAs will assist the client in locating a new auditor, and proceed with disclaim an audit opinion. Perform the audit as normal, and request written assurances from both top management and the internal audit function relating to areas of higher audit risk