Asked by Riley Runnells on Jun 07, 2024
Verified
Ezra, an accountant, intentionally misstates a material fact to mislead Fruit Packing Inc., a client. Fruit Packing justifiably relies on the misstatement to its detriment. Ezra is most likely liable for
A) actual fraud.
B) constructive fraud.
C) destructive fraud.
D) virtual fraud.
Actual Fraud
Refers to intentional deception made for personal gain or to damage another individual.
Material Fact
An important fact that if known might influence a decision maker’s decision, such as in a contract negotiation or in the dissemination of information to investors.
Mislead
To cause someone to have a wrong idea or impression about someone or something.
- Differentiate between the concepts of negligence, malpractice, and fraud in the realm of professional services.
Verified Answer
JC
Jalyn CredleJun 09, 2024
Final Answer :
A
Explanation :
Ezra's intentional misstatement of a material fact to mislead Fruit Packing Inc., which then justifiably relies on this misstatement to its detriment, constitutes actual fraud. Actual fraud involves intentional deception to secure unfair or unlawful gain.
Learning Objectives
- Differentiate between the concepts of negligence, malpractice, and fraud in the realm of professional services.