Fact Pattern 14-A3 (Questions A16-A17 apply)
Flip,an accountant,certifies an audit for Erstwhile Corporation,Flip's client,knowing that Erstwhile will use the audit to obtain a loan from Deepwater Bank.Flip believes that the audit is true and does not intend to deceive the bank,but does not check the audit before certifying it.
-Refer to Fact Pattern 14-A3.Under these circumstances,Deepwater's best course of action is most likely to
A)exert economic duress on Flip to retire from accounting.
B)rescind the loan on the ground of unconscionability.
C)recover damages from Flip for any loss on the loan.
D)undercut Flip's career with negative puffery.

Question

Quizplus · Accepted Answer

Deepwater's best course of action would be to recover damages from Flip for any loss on the loan since Flip certified the audit without checking it, making him liable for any losses incurred by Deepwater due to the inaccurate audit. Exerting economic duress on Flip or undercutting his career with negative puffery would not be appropriate or legal actions. Rescinding the loan on the ground of unconscionability would not be a viable option either as there is no evidence of unconscionability in the given fact pattern.

Fact Pattern 14-A3 (Questions A16-A17 Apply)