It was subsequently learned that the cpa despite the


Valley View Manufacturing Inc., sought a $500,000 loan from First National Bank. National insisted that audited financial statements be submitted before it would extend credit. Valley View agreed to this and also agreed to pay the audit fee. An audit was performed by an independent CPA who submitted her report to Valley View to be used solely for the purpose of negotiating a loan from National. National, upon reviewing the audited financial statements decided in good faith not to extend the credit desired. Certain ratios which as a matter of policy were used by National in reaching its decision were deemed too low. Valley View used copies of the audited financial statements to obtain credit elsewhere. It was subsequently learned that the CPA, despite the exercise of reasonable care, had failed to discover a sophisticated embezzlement scheme by Valley View's chief accountant. Under these circumstances, what liability does the CPA have?

Solution Preview :

Prepared by a verified Expert
Business Management: It was subsequently learned that the cpa despite the
Reference No:- TGS01151158

Now Priced at $15 (50% Discount)

Recommended (96%)

Rated (4.8/5)