Asked by Bianca Benincasa on May 01, 2024
Verified
Under the Restatement test, referenced in the text's discussion of the case Bily v. Arthur Young & Co., which of the following is true regarding the effort by Bank XYZ to recover against Amina based upon Maggie's default?
A) The bank will be able to recover because it was in privity with Amina.
B) The bank will be able to recover because it was in privity with Maggie, and Maggie was in privity with Amina.
C) The bank will be able to recover because Amina was aware that her audit would be used to obtain a loan.
D) The bank will not be able to recover because it cannot establish reliance upon Amina's work.
E) The bank will not be able to recover because Amina and Maggie had specifically agreed that the audit would only be used to obtain a loan from Maggie's uncle.
Restatement Test
A process or set of guidelines used to reevaluate or reinterpret legal principles or statutory laws, often to clarify or update them.
Recover Against Amina
Refers to the legal process or actions taken to obtain restitution or remedy from an individual named Amina due to a loss or injury caused.
Loan Default
Failure to meet the legal obligations or conditions of a loan agreement, such as not making payments on time.
- Comprehend the fundamental principles of accountant liability towards third parties, incorporating acknowledgment of various rules (for instance, Ultramares, Restatement).
- Examine the influence of prenuptial agreements and personal relationships on the ethical and legal responsibilities of accountants.
Verified Answer
Learning Objectives
- Comprehend the fundamental principles of accountant liability towards third parties, incorporating acknowledgment of various rules (for instance, Ultramares, Restatement).
- Examine the influence of prenuptial agreements and personal relationships on the ethical and legal responsibilities of accountants.
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