Under state law, which of the following statements most accurately reflects the liability of a CPA who fraudulently prepares a client's tax return?
A. The CPA is liable only to third parties in privity of contract with the CPA.
B. The CPA is liable only to known users of the financial statements.
C. The CPA probably is liable to any person who suffered a loss as a result of the fraud.
D. The CPA probably is liable to the client even if the client was aware of the fraud and did not rely on the opinion.
Answer: C. The CPA probably is liable to any person who suffered a loss as a result of the fraud.
Business
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