Auditing and Assurance Services (16th Edition)
16th Edition
ISBN: 9780134065823
Author: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan
Publisher: PEARSON
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Question
Chapter 5, Problem 16.2MCQ
To determine
Identify the element that a plaintiff should prove to hold a CPA who signs off on financial statements in a registration statement liable for misrepresentation in the financial statements under section 11 of the 1933 Act.
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Which of the following in NOT a legal element of proof required to recover for defamation? A. The defendant made a true statement of fact. B. The statement was communicated (published) to a third party or parties. C. The statement was made on an unprivileged occasion. D. The statement damaged the reputation of the subject
4. 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.
What 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?
Chapter 5 Solutions
Auditing and Assurance Services (16th Edition)
Ch. 5 - Prob. 1RQCh. 5 - Prob. 2RQCh. 5 - Prob. 3RQCh. 5 - Prob. 4RQCh. 5 - Prob. 5RQCh. 5 - Prob. 6RQCh. 5 - Prob. 7RQCh. 5 - Prob. 8RQCh. 5 - Prob. 9RQCh. 5 - Prob. 10RQ
Ch. 5 - What potential sanctions does the SEC have against...Ch. 5 - Prob. 12RQCh. 5 - Prob. 13RQCh. 5 - Prob. 14.1MCQCh. 5 - Prob. 14.2MCQCh. 5 - Prob. 14.3MCQCh. 5 - Prob. 15.1MCQCh. 5 - Prob. 15.2MCQCh. 5 - Prob. 15.3MCQCh. 5 - Prob. 16.1MCQCh. 5 - Prob. 16.2MCQCh. 5 - Prob. 16.3MCQCh. 5 - Prob. 17DQPCh. 5 - Prob. 18DQPCh. 5 - Prob. 19DQPCh. 5 - Prob. 20DQPCh. 5 - Prob. 21DQPCh. 5 - Prob. 22DQPCh. 5 - Prob. 23DQPCh. 5 - Under Section 11 of the Securities Act of 1933 and...Ch. 5 - Prob. 25DQPCh. 5 - Prob. 26DQPCh. 5 - Prob. 27C
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Similar questions
- What elements does a plaintiff have to prove to be successful in a case against a negligent auditor?arrow_forwardUnder common law, which of the following statements most accurately reflects the liability of a CPA who fraudulently gives an opinion on an audit of a client's financial statements? A. The CPA is liable only to third parties in privity of contract with the CPA B. The CPA is liable only to known users of the financial statements C. The CPA probably is liable to any person who suffered a loss as a result of the fraud D. The CPA probably is liable to the client even if the client was aware of the fraud and did not rely on the opinionarrow_forwardA person who filed for bankruptcy and was discharged cannot be held criminally liable if later found to have failed to disclose assets. True Falsearrow_forward
- am. 27.arrow_forwardAuditors may be held liable to both their clients and third parties under common law. a. What must a client prove to recover its losses from the auditors under common law? b. In a court that adheres to the precedent set by the Ultramares v. Touche case, what must an ordinary third party prove to recover losses from the auditors under common lawarrow_forwardAn attorney may impeach an opposing party’s witness by showing/proving that the witness: A. Has been convicted of a misdemeanor. B. Made prior consistent statements. C. Has a reputation for truthfulness. D. Is influence by bias or self-interest.arrow_forward
- What are the consequences for a CPA who commits an Act Discreditable?arrow_forwardWhich of the following elements is not a requirement for a plaintiff to recover damages under the traditional theory of torts? The plaintiff must have been harmed The defendant's act must have caused the harm The defendant's act must have been a breach of the duty of reasonable care under the circumstances O The harm must be to a person, not property.arrow_forwardWhich of the following is NOT an element required to recover to establish liability for negligent infliction of emotional distress claim? A. The defendant engaged in extreme and outrageous conduct. B. The conduct subjected the plaintiff to public humiliation. C. The conduct caused severe emotional distress. D. The conduct resulted in physical symptoms or bodily harm.arrow_forward
- Why are auditors not liable for defamation in connection with his/her audit?arrow_forward2. A client has departed from GAAP for what you, the auditor, considers to be justifiable. The financial statements would have been misleading if the client had not departed from GAAP. Circumstance: Type of Opinion:arrow_forwardSome criticize the accounting profession for using expressions in the audit report that seem to be building in deniability should the client commit a fraudulent act. What expressions enable the CPA to build a defense should the audit wind up in the courtroom? Do you see anything wrong with these expressions from an ethical point of view?arrow_forward
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