Edward, an accountant, is hired by C Ltd to prepare a report on the financial strength of C Ltd. Edward is informed that the purpose of the report is to persuade H Ltd to buy all C Ltd’s shares....

Edward, an accountant, is hired by C Ltd to prepare a report on the financial strength of C Ltd. Edward is informed that the purpose of the report is to persuade H Ltd to buy all C Ltd’s shares. Edward prepares the report but carelessly fails to identify that C Ltd is not profitable. Which of the following is accurate concerning Edward’s potential liability for negligent misstatement:

Select one:

a. Edward will not be liable to H Ltd because there was no contract between him and H Ltd

b. Edward will not be liable because his advice was prepared for C Ltd, not H Ltd

c. Edward will be liable because the advice was prepared specifically for the purpose of persuading H Ltd to acquire shares in C Ltd, and it was reasonable for H Ltd to rely on Edward's advice.

d. Edward will not be liable because it was not reasonable for H Ltd to rely on his advice.

Jun 10, 2022

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Edward, an accountant, is hired by C Ltd to prepare a report on the financial strength of C Ltd. Edward is informed that the purpose of the report is to persuade H Ltd to buy all C Ltd’s shares....

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