Answered

When courts find accountants liable for constructive fraud, the implication is that: _______.

A. Auditors should always be liable when investors lose money due to deceit
B. Accountants may be liable for fraud even when they had no knowledge of deceit
C. Accountants may be held liable even to third parties to whom they did not have a duty
D. Auditors should be able to detect all deceit by management

Answer :

letmeanswer

When courts find accountants liable for constructive fraud, the implication is that accountants may be liable for fraud even when they had no knowledge of deceit .

Option C

Explanation:

In a company there are various departments were the daily activities are being carried out. Among the departments one of important and vital to the company’s development is accounts department.

They are considered to be the department who will manage the entire money transaction of the company’s requirement.

So, the person who is very much involved in all these transactions is the accountant whose job is to monitor the amount of cash flow into the company and go out of the company.

Any misgivings happening in the department will affect the company and accountant is held responsible for the fraud that had happened without his knowledge. This is also the purview of the judiciary.  

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