Question 19

• A privity relationship means that:
• A.A party may be a user of the financial statements
• B.A party may sue if fraud has taken place
• C.A party's financial liability is limited
• D.A party has a contractual obligation

Question 20

• The Restatement (Second) of Torts Approach:
• A.Expands an accountant's legal liability to third parties identified by the client as intended recipients of work
• B.Limits an accountant's legal liability to only those parties with which it has a privity relationship
• C.Limits an accountant's legal liability to only those parties that have been named by the client
• D.Expands an accountant's legal liability to all possible users of the audited financial statements