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Note: the same fact pattern is used for each legal liability question. Onsi and Ismail,...

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Accounting

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Note: the same fact pattern is used for each legal liability question. Onsi and Ismail, LLP were the auditors for ZZZZ Crazy Freddie for the entire period 2012 through 2017. During this period, ZZZZ Crazy Freddie went from a privately-held company to publicly-held as the result of a 2012 initial public offering. ZZZZ Crazy Freddie had systematically overstated income during the entire period using a variety of schemes involving sales, inventory, and sales returns. Onsi and Ismail were not aware of the scheme to overstate income, but were negligent (not grossly negligent) in the performance of their audit procedures. Onsi and Ismail will claim that there was no knowledge or intent to deceive this party A bank that had loaned money to ZZZZ Crazy Freddie throughout the period. An audit is required under the loan agreement Shareholders who bought stock in the IPO. Other shareholders who purchased stock after the IPO. Trade creditors that relied on the financial statements

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