D is corrent. If it can be established that a CPA recklessly departed from the standards of due care while performing an audit, then the CPA can be held liable to any third parties for gross negligence.
A is incorrect. The theory of strict liability is not applicable when deciding the liability of the CPA.
B is incorrect. Negligence on the part of a CPA arises from the failure to comply with the standards of due care while conducting an audit. This is distinguished from gross negligence which is a reckless departure from the standards of due care. A CPA is generally not liable to foreseeable third parties for ordinary negligence.
C is incorrect. A CPA is liable for breach of contract only to clients. Third parties may not sue a CPA for breach of contract since there is no privity of contract between the CPA and the third parties.
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