Author Question: Cable Corp orally engaged Drake & Co, CPAs, to audit its financial statements. Cable's ... (Read 119 times)

crazycityslicker

  • Hero Member
  • *****
  • Posts: 537
Cable Corp orally engaged Drake & Co, CPAs, to audit its financial statements. Cable's management informed Drake that it suspected the accounts receivable were materially overstated. Though the financial statements Drake audited included a materially overstated accounts receivable balance, Drake issued an unqualified opinion. Cable used the financial statements to obtain a loan to expand its operations. Cable defaulted on the loan and incurred a substantial loss. If Cable sues Drake for negligence in failing to discover the overstatement, Drake's best defense would be that Drake did not:
 a. Have privity of contract with Cable.
  b. Sign an engagement letter.
  c. Perform the audit recklessly or with an intent to deceive.
  d. Violate generally accepted auditing standards in performing the audit.

Question 2

Responsible parties under Superfund include past owners and any transporter of toxic waste who dumped at the site being cleaned up.
 a. True
  b. False
  Indicate whether the statement is true or false



gabrielle_lawrence

  • Sr. Member
  • ****
  • Posts: 353
Answer to Question 1

.D

Answer to Question 2

TRUE



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

The Centers for Disease Control and Prevention (CDC) was originally known as the Communicable Disease Center, which was formed to fight malaria. It was originally headquartered in Atlanta, Georgia, since the Southern states faced the worst threat from malaria.

Did you know?

The familiar sounds of your heart are made by the heart's valves as they open and close.

Did you know?

Adolescents often feel clumsy during puberty because during this time of development, their hands and feet grow faster than their arms and legs do. The body is therefore out of proportion. One out of five adolescents actually experiences growing pains during this period.

Did you know?

Tobacco depletes the body of vitamins A, C, and E, which can result in any of the following: dry hair, dry skin, dry eyes, poor growth, night blindness, abscesses, insomnia, fatigue, reproductive system problems, sinusitis, pneumonia, frequent respiratory problems, skin disorders, weight loss, rickets, osteomalacia, nervousness, muscle spasms, leg cramps, extremity numbness, bone malformations, decayed teeth, difficulty in walking, irritability, restlessness, profuse sweating, increased uric acid (gout), joint damage, damaged red blood cells, destruction of nerves, infertility, miscarriage, and many types of cancer.

Did you know?

Many medications that are used to treat infertility are injected subcutaneously. This is easy to do using the anterior abdomen as the site of injection but avoiding the area directly around the belly button.

For a complete list of videos, visit our video library