微信扫一扫
实时资讯全掌握
| Mell Corp. engaged Davis & Co., CPAs, to audit Mell’s financial statements. Mell’s management informed Davis it suspected that the accounts receivable were materially overstated. Although the financial statements did include a materially overstated accounts receivable balance, Davis issued an unqualified opinion. Mell relied on the financial statements in deciding to obtain a loan from County Bank to expand its operations. County relied on the financial statements in making the loan to Mell. As a result of the overstated accounts receivable balance, Mell has defaulted on the loan and has incurred a substantial loss.If County sues Davis for fraud, must Davis furnish County with the audit working papers? A. No, because County was not in privity of contract with Davis. B. Yes, provided that Mell does not object. C. No, because of the privileged communication rule, which is recognized in a majority of jurisdictions. D. Yes, if the working papers are lawfully subpoenaed into court. |