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CIMAPRA17-BA4-1 Exam - Topic 3 Question 62 Discussion

Actual exam question for CIMA's CIMAPRA17-BA4-1 exam
Question #: 62
Topic #: 3
[All CIMAPRA17-BA4-1 Questions]

M wrote to A (Accountants), asking if he could rely on the firm's audit report of B Ltd. M told A (Accountants), confidentially, that he was considering making a take-over bid for B Ltd. A (Accountants) advised M that he could rely on the report. As a result, M relied on the report and purchased the entire share capital of B Ltd. M has now discovered that he has paid considerably more for the shares than they were worth, as the company's stock had been negligently over-valued in the audit report.

Which of the following is correct?

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Suggested Answer: C

by Devorah at Dec 06, 2022, 04:02 PM

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Lashaunda
4 months ago
C seems off, just because he didn't pay doesn't mean he can't hold them accountable.
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Reiko
4 months ago
Definitely B, they knew M would rely on it!
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Rikki
4 months ago
Surprised M thought he could rely on that report without paying for advice.
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Luke
4 months ago
I disagree, M should be able to sue for negligence!
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Lenita
4 months ago
A is right, they only owe a duty to B Ltd.
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Rupert
5 months ago
I keep getting mixed up about contractual duties versus tort duties. I wonder if A could be right since they only owe a duty to B Ltd.
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Tonja
5 months ago
This scenario feels similar to a practice question we did on reliance and duty of care. I think B makes the most sense here.
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Reynalda
5 months ago
I'm not entirely sure, but I think the fact that M didn't pay for the advice might make C a possibility.
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Princess
5 months ago
I remember discussing how auditors owe duties to third parties in certain situations, so I think B could be the right answer.
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Carman
5 months ago
This one seems pretty straightforward. I'm thinking the answer is C, enabling the virtual machine firewall, since that's a standard security practice and not a high-risk operation.
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Chun
5 months ago
Data is the raw facts and figures, while information is what we derive from analyzing and interpreting that data. Gotta remember that distinction.
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Glory
5 months ago
The key is remembering the specific media interfaces that Genesys supports. I'll eliminate the ones I'm unsure about and focus on the two I'm most confident in.
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Dottie
5 months ago
Hmm, this looks like a tricky one. I'll need to carefully read through the question and the SignatureDefs to figure out the correct way to structure the predict request.
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Elvera
5 months ago
I think we focused on preventive and detective measures in class, so I might lean towards option B.
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Maryrose
9 months ago
Option C is clearly wrong. M didn't have to pay for the advice, but he still suffered the consequences of relying on it. The accountants should be held responsible.
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Billi
9 months ago
Haha, I bet the accountants are kicking themselves for giving M that report. They probably thought they were getting a juicy takeover fee, but now they're facing a lawsuit instead!
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Monroe
8 months ago
It's a tough situation for everyone involved, especially with the potential lawsuit.
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Nenita
8 months ago
User 3: M must be furious for overpaying for the shares.
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Cassi
8 months ago
User 2: They should have been more careful with their audit report.
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Ines
9 months ago
I think M might have a case against the accountants for negligence.
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Julieta
9 months ago
M must be really upset about overpaying for B Ltd.
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Reita
9 months ago
Yeah, the accountants should have been more careful with their audit report.
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Tyra
9 months ago
User 1: I can't believe the accountants didn't see this coming.
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Julie
10 months ago
But what about the contractual duty to B Ltd? Does that matter?
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Dierdre
11 months ago
I'm not sure why M can't recover damages for breach of contract. The accountants were aware of the purpose for which their report would be used, so they should be liable for the consequences.
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Argelia
9 months ago
D) M can recover damages from A (Accountants) for breach of contract.
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Jacklyn
9 months ago
I'm not sure why M can't recover damages for breach of contract. The accountants were aware of the purpose for which their report would be used, so they should be liable for the consequences.
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Sherell
10 months ago
B) M can sue A (Accountants) in the tort of negligence as they knew that M intended to rely on their report and the purpose for which he intended to use it.
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Brendan
10 months ago
A) M cannot recover compensation from A (Accountants) in tort, as they only owe a contractual duty to B Ltd.
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Barbra
11 months ago
Option B seems to be the correct answer. The accountants owed a duty of care to the third party, M, who they knew would rely on their report for the purpose of a takeover bid.
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Elsa
11 months ago
I agree with Major, A (Accountants) knew M was relying on their report.
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Major
11 months ago
I think M can sue A (Accountants) in the tort of negligence.
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