SOLVED

[Accountant Dissatisfaction] Andrew agreed to perform accounting services for Dominique, and they entered into a contract setting forth the terms of their agreement. Dominique wanted Andrew to review her financial information and her system of internal controls. Dominique became dissatisfied with Andrew’s work after he reported some irregularities in her financial statements. Andrew, on the other hand, claimed that he had adequately performed his duties and that, at the most, any mistakes that he made were minimal. 56) Which of the following would be available to Dominique, assuming that she can establish that Andrew failed to meet his contractual obligations? A) Reasonable and foreseeable damages related to the breach and damages for fraud which would be presumed. B) Only a recovery for the cost of obtaining a different accountant to perform breached contractual duties. C) Nothing unless the contact specifically provides for damages in the event of a breach. D) Reasonable and foreseeable damages related to the breach excluding the cost of another accountant to perform breached contractual duties. E) The cost of obtaining a different accountant to perform breached contractual duties and also any reasonable and foreseeable damages related to the breach. 57) If Andrew engaged in breach, he is not entitled to compensation for work completed. A) A material B) A substantial C) Any type of D) A comprehensive E) An adequate 58) Andrew may be entitled to complete compensation minus the amount of damages caused by the breach if he performed on the contract. A) Substantially B) Materially C) Completely D) Adequately E) Partially  [Travel Plans] Amina, a certified public accountant, is hired by Yuri to do an audit on his business. He tells her that the audit results will be used by him in an attempt to obtain a $10,000 loan, probably from Bank ABC. Later, however, Yuri changes his mind and uses the approved financial statements from Amina to get a loan for $100,000 from Bank XYZ. On the same day that she was hired by Yuri, Amina, who specializes in reviewing financial statements for companies seeking loans, was approached by Jonathan, who asked her to review his financial statements so that he could get a loan for $10,000 from an unspecified bank. Amina approved the statements, and he got a loan from Bank ABC. Additionally, Maggie requested that Amina review her financial statements so that she could get a loan of $25,000 from a rich uncle. Amina is a bit uneasy about Maggie because she believes that Maggie is somewhat untrustworthy. Therefore, Amina requires that Maggie agree in writing that the report will be transmitted only to the uncle, not to any other potential lenders. Amina approved the financial statements but, in fact, Maggie uses the approved statements to get a loan for $25,000 from Bank XYZ. During the time that she had set aside to audit and review the financial statements of Yuri, Jonathan, and Maggie, Amina was also preparing for an important trip. She was busy arranging transportation and accommodations for her stay. All of this negatively affected her work and she negligently approved all financial statements referenced. Unfortunately, Yuri, Jonathan, and Maggie ended up defaulting on the loans. The lenders sued Amina. 59) Under the Restatement Test, referenced in the text’s discussion of the case Bily v. Arthur Young & Co., which of the following is true regarding whether Bank XYZ can recover against Amina based upon the loan to Yuri? A) Bank XYZ will not be able to recover $100,000 from Amina because the transaction went from $10,000 to $100,000, increasing materially the audit risk. B) Bank XYZ will be able to recover from Amina because there was privity of contract. C) Bank XYZ will be able to recover from Amina only if they have been a client of hers in the past. D) Bank XYZ will not be able to recover because it was not in privity with Amina. E) Bank XYZ will not be able to recover because Amina did not know that Yuri planned to get a loan from Bank XYZ. 60) Under the Restatement Test, referenced in the text’s discussion of the case Bily v. Arthur Young & Co., which of the following is true regarding the action brought by Bank ABC against Amina based upon the loss of funds on Jonathan’s loan? A) The bank will be able to recover because Amina was aware of how her work would be used even if she did not know the exact name of the bank involved. B) The bank will not be able to recover unless it can establish that it had dealt with Amina in the past. C) The bank will be able to recover because there was privity of contract. D) The bank will not be able to recover because the identity of the bank was not known to Amina. E) The bank will be able to recover because no more than $10,000 was involved.  Â