Choice "C" is correct. This question is about to whom a CPA owes a duty. A CPA's duties are broadest with regard to fraud. A duty to refrain from fraud is owed to anyone who can make out the elements of a fraud case (misrepresentation, intent to deceive, reliance, intent to induce reliance, and damages). Because Able intentionally made the false statement and Ranch was harmed as a result, Ranch can hold Able liable for his damages.
Choice "a" is incorrect. A CPA is not strictly liable for misstatements in financial statements; the CPA must be at least negligent in order to have any liability in most cases.
Choice "d" is incorrect. It does not matter whether or not Ranch was a foreseen user of the audit report because the action here is for fraud. If the action were for negligence, foreseeability would limit Able's liability.
Choice "b" is incorrect. It does not matter whether or not Ranch was in privity of contract with Able. A CPA's liability for fraud (or even for negligence in most states) is not limited to those with whom the CPA is in privity.