Exam 48: A: Professional Liability and Accountability

An accountant is not liable for an omission in a registration statement to a purchaser of securities if the omission had no causal connection to the purchaser's loss.

Filtration Products,Inc. ,files a suit against Emmett,its former account?ant,al?leging constructive fraud.Emmett may be held liable

Professionals can limit their liability to some extent by disclaiming it.

Tiny is an accountant.Tiny's violation of generally accepted accounting principles and generally accepted auditing standards

Hadley and Ilene are accountants who work together.Hadley and Ilene can limit their potential liability for each other's misconduct by organizing their business as

Lacy is an accountant who prepares her clients' tax returns.Muff is not an accountant,but he also prepares tax returns for clients.Under the In?ternal Revenue Code,liability for preparing a false return may be im?posed on

An accountant may be liable to anyone who acquires a security covered by a registration statement that contains a materially false statement.

Lara,an accountant,conducts an audit of Microstuff,Inc.After the con?clu?sion of the audit,the working papers created in preparing the audit must be

For a plaintiff to recover damages under Section 10(b)of the Securities Exchange Act of 1934 and SEC Rule 10b-5,privity is necessary.

Yves is an accountant charged with negli?gence by Zesty Soup Company,a client.Yves may successfully defend against the claim if he can show that

The Sarbanes-Oxley Act of 2002 applies only to foreign public accounting firms that provide auditing services to "issuers."

An auditor must use adequate procedures in an audit to detect any ille?gal acts of the company being audited.

In most courts,auditors cannot be held liable to third parties for negli?gence in the performance of their duties.

Estes,an accountant,contracts to perform services for Frasier.In per?forming those services,Estes uncovers a suspicious financial transac?tion.Estes is most likely not liable if he

A client's negligence is never a defense to a charge of negligence against an accountant.

Mona,an accountant,prepares for NuTech Corporation a financial statement that omits a material fact.The financial statement is included in NuTech's registration statement,which Pam reads.Pam buys NuTech stock.Under Section 11 of the Securities Act of 1933,for Mona to be liable for the omission,Pam must show that

Tony is an accountant whose clients include U-All Company.If Tony is negligent in his work for U-All,most courts would hold him liable to U-All and

Samantha is an accountant.Theo is an attorney.Which professional is most re?stricted from disclosing her or his client's communication?

Rex,an accountant,enters into a contract to provide services to Sofi.Rex does not finish the work within the contract's deadline.Sofi pays a pen?alty for the missed deadline and hires Trey to complete the job.Rex is most likely liable for

Pluto accuses Quark,an accountant,of committing defalcation.This is