Which of the following correctly states the current law resulting from the Grant

Question

Which of the following correctly states the current law resulting from the Grant Thornton v. Prospect High Income Fund case?

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a. A CPA who publishes audited financial statements in Texas is liable for negligence to those who give notice to the CPA prior to publication of the financial statements. Such a CPA is not liable for holder losses. Nor is such a CPA liable for losses suffered by users of such financial statements who the CPA could reasonably foresee using the financial statements but who did not give the CPA notice of their use of the financial statements prior to publication. b. A CPA who publishes audited financial statements in Texas is liable for fraud to those who give notice to the CPA prior to publication of the financial statements. Such a CPA is not liable for holder losses. Nor is such a CPA liable for losses suffered by users of such financial statements who the CPA could reasonably foresee using the financial statements but who did not give the CPA notice of their use of the financial statements prior to publication. c. A CPA who publishes audited financial statements in Texas is liable for breach of contract to those who give notice to the CPA prior to publication of the financial statements. Such a CPA is not liable for holder losses. Nor is such a CPA liable for losses suffered by users of such financial statements who the CPA could reasonably foresee using the financial statements but who did not give the CPA notice of their use of the financial statements prior to publication. d. None of the other choices are correct. e. A CPA who publishes audited financial statements in Texas is liable for negligence to those who give notice to the CPA prior to publication of the financial statements. Such a CPA is liable for holder losses. Such a CPA is liable for losses suffered by users of such financial statements who the CPA could reasonably foresee using the financial statements but who did not give the CPA notice of their use of the financial statements prior to publication.

Explanation / Answer

Solution: A CPA who publishes audited financial statements in Texas is liable for negligence to those who give notice to the CPA prior to publication of the financial statements. Such a CPA is liable for holder losses. Such a CPA is liable for losses suffered by users of such financial statements who the CPA could reasonably foresee using the financial statements but who did not give the CPA notice of their use of the financial statements prior to publication.

Explanation: CPA will be held responsible for the losses suffered by the users arising due to the liability of negligence

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