Question

Under the common law, an individual or company that (1) does not have a contract with an auditor, (2) is known by the auditor in advance of the audit, and (3) will use the auditor's report to make decisions about the client company has: a. Foreseen user

b. Foreseeable user
c. Known user
d. Intended user

Answer 1

The correct classification for an individual or company known by an auditor, who will use the audit report to make decisions about the client company under common law, is a 'foreseeable user'.

Step-by-step explanation:

The question pertains to the classification of users in the context of auditor reports under common law. When an individual or company does not have a direct contract with an auditor but is known by the auditor to be relying on the financial statements, they are referred to as a foreseen user.

This individual or company is specifically anticipated by the auditor before the audit is completed and intends to utilise the report to make decisions about the client company. Therefore, the correct answer is: b. Foreseeable user.