ACCA LW题目分享accounts overstated

ACCA LW题目分享accounts overstated

SWS plc decided to acquire a local competitor, DFE Ltd. Prior to finalising its bid, SWS plc arranged a meeting with DFE Ltd ’ s auditors. SWS plc made it clear to the auditors that it was considering making a takeover bid for DFE Ltd. The auditors confirmed that DFE Ltd ’ s accounts showed a true and fair view. Following the meeting, SWS plc made a bid for DFE Ltd which was accepted. It has since come to light that the accounts overstated DFE Ltd’s assets, and that SWS plc paid too much for DFE Ltd ‘ s shares.

For each of the following statements regarding the advice SWS plc received from DFE Ltd’ s auditors, indicate whether it is true or false.（ 2 marks）

解析：

Task 2:False , False

Based on a case such as ADT Ltd v BDO Binder Hamlyn (1995) in a situation where an auditor is specifically asked by a prospective bidder whether the accounts of the target company show a true and fair view of the company ’ s financial position and they confirm that they do, then the auditor owes a duty of care to the bidding company.