Principles of Auditing & Other Assurance Services (Irwin Accounting)
20th Edition
ISBN: 9780077729141
Author: Ray Whittington, Kurt Pany
Publisher: McGraw-Hill Education
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Question
Chapter 4, Problem 32OQ
To determine
Which sections of the Securities Act, 1933 applies to the given situations.
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Contrast the auditor’s liability under the Securities Act of 1933 withthat under the Securities Exchange Act of 1934.
Individuals who believe they relied on misstated financial statements to make a decision andhave suffered losses as a result will issue an action known as aa. Breach of contract.b. Tort.c. Securities litigation.d. Constructive fraud.
Under which act (or acts) must a client prove that a CPA has performed an audit with due diligence to establish
that CPA's liability?
Securities
Securities Exchange
Act of 1933
Act of 1934
Yes
A.
Yes
B.
Yes
No
C.
No
Yes
D.
No
No
Multiple Choice
22
Chapter 4 Solutions
Principles of Auditing & Other Assurance Services (Irwin Accounting)
Ch. 4 - Prob. 1RQCh. 4 - Prob. 2RQCh. 4 - Prob. 3RQCh. 4 - Prob. 4RQCh. 4 - Prob. 5RQCh. 4 - Prob. 6RQCh. 4 - Prob. 7RQCh. 4 - Prob. 8RQCh. 4 - Prob. 9RQCh. 4 - Prob. 10RQ
Ch. 4 - Prob. 11RQCh. 4 - Prob. 12RQCh. 4 - Prob. 13RQCh. 4 - Prob. 14RQCh. 4 - Prob. 15RQCh. 4 - Prob. 16RQCh. 4 - Prob. 17RQCh. 4 - Prob. 18RQCh. 4 - Prob. 19RQCh. 4 - Prob. 20QRACh. 4 - Prob. 21QRACh. 4 - Prob. 22QRACh. 4 - Prob. 23QRACh. 4 - Prob. 24QRACh. 4 - Prob. 25QRACh. 4 - Prob. 26QRACh. 4 - Gordon Moore, CPAs, were the auditors of Fox ...Ch. 4 - Prob. 28AOQCh. 4 - Prob. 28BOQCh. 4 - Prob. 28COQCh. 4 - Prob. 28DOQCh. 4 - Prob. 28EOQCh. 4 - Prob. 28FOQCh. 4 - Prob. 28GOQCh. 4 - Prob. 28HOQCh. 4 - Prob. 28IOQCh. 4 - Prob. 28JOQCh. 4 - Prob. 28KOQCh. 4 - Prob. 28LOQCh. 4 - Prob. 29OQCh. 4 - Prob. 30OQCh. 4 - Match the important cases listed below with the...Ch. 4 - Prob. 32OQCh. 4 - Prob. 33OQCh. 4 - Prob. 34PCh. 4 - Prob. 35PCh. 4 - Prob. 36PCh. 4 - Charles Worthington, the founding and senior...Ch. 4 - Prob. 38PCh. 4 - Prob. 39PCh. 4 - Prob. 40PCh. 4 - Prob. 41ITCCh. 4 - Prob. 42RDC
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- 1. Under the Statute of Frauds, the following contracts must be in writing, otherwise they cannot be enforced in court litigation except CHOICES: Sale of personal property at a price not more than P300.00 Sale of real property regardless of the price involved Sale of property not to be performed within a year from the date thereof regardless of the nature of the property and price involved Answer not givenarrow_forwardInvestments in equity securities for which the investor has insignificant influence over the investee are classified for reporting purposes under the fair value method in one of two categories. What are these two categories?arrow_forwardsubject accounting :- QUESTION 1 With reference to statutory provisions and decided cases, define "consideration" and explain THREE (3) types of consideration. QUESTION 2 An agreement is voidable if there is misrepresentation or fraud which induces the innocent party to enter into the agreement. With reference to statutory provisions and decided cases, explain the above statement.arrow_forward
- If civil tax fraud pursuant to IRC § 6663 is asserted by the IRS, the burden of proof falls upon the IRS by what standard? Select one: a. beyond reasonable doubt b. clear and convincing c. preponderance of evidence d. the taxpayer because the IRS.arrow_forwardMisrepresentation discovered by an insurer may result in the policy being voided. Which one (1) of the following circumstances must the insurer show occurred to legally void the policy? The misrepresentation was malicious. The misrepresented fact was material to the risk. The misrepresentation was the result of extreme carelessness by the insured's broker. The misrepresented fact was the product of collusion between the insured and the broker.arrow_forward4. Which of the following is true of a contingent liability? OIt is a potential liability that depends on a future event. OIt is an actual liability that is difficult to estimate. OIt is an actual liability that depends on a past event. OIt is a court-imposed liability based on an officer's fraud as decided in a completed lawsuit.arrow_forward
- A note secured by a deed of trust provides for an automatic action of the laws known as a.a strict foreclosure. b.equitable rights. c.a power of sale. d.a statutory right.arrow_forwardWhat does a third-party user of financial statements have to prove under common law in a suit against an auditor for the auditor's negligence? Explain each item with an examplearrow_forwardwhich of the following is true? a.When what is to be delivered is a generic thing, the creditor may ask a person other than the debtor to perform the obligation. b.Dolo incidente relates to the fraud committed at the time of the perfection of a contract. c.When negligence is imputed as a cause for the breach in an obligation, the same is presumed.arrow_forward
- 6. Buwis Buhay Incorporated had several outstanding obligations on December 31, 2019. The brief descriptions listed below can be ascertained from these liabilities. r. In June 2019, Buwis Buhay was involved in a court case amounting to P10,000,000. The attorney assessed that it is probable that the company will win the case with P4,500,000 as the best estimate of the reward. • In August 2019, Baguio City brought an action against the company for polluting the surrounding rivers with its waste products costing P5,000,000. It is probable that Baguio City will be successful but the amount of damages Buwis Buhay might have to pay is not to exceed P2,500,000. • In December 2019, another litigation case amounting to P20,000,000 was filed against Buwis Buhay for injuring pedestrians due to its renovation projects within the premise. This court case is seen to have remote likelihood of occurrence because the evidences filed are not strong.arrow_forwarda. All statements are correct b. Only S2 is incorrect c. Only S3 is incorrect d. All statements are incorrect e. only S2 is correct f. only S3 is correct g. Only S1 is incorrect h. Only S1 is correctarrow_forwardWhat does a third-party user of financial statements have to prove under common law in a suit against an auditor for the auditor's negligence?arrow_forward
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