Exam 22: Professional Liability and Accountability

An accountant's liability under the Securities Act of 1933 does I require privity of contract with the purchaser of a security.

Accountants must surrender possession of working papers relating to an audit or review to the party for whom the work was performed.

Reed prepares federal corporate income tax returns for Shopping Malls, Inc., and other firms. Under the Internal Revenue Code, with respect to an understatement of a client's tax liability, Reed may be liable for​

Accountants are exempt from the criminal provisions of federal tax laws.

Attorneys are required to find relevant law that is applicable to a case and can be discovered through a reasonable amount of research.

April is an accountant whose clients include Bistro Restaurants Inc. If April is negligent in her work for Bistro, most courts would hold her liable to Bistro and​

Cathy is an accountant with Discount Retail Corporation. Efrem buys Discount Retail stock and loses money on the investment. To recover from Cathy under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5, Efrem must prove​

Generally, an attorney is not liable to a nonclient unless the attorney has committed fraud or malicious conduct.

To obtain damages for fraud, an innocent party does not need to have been injured.

Lauren is an attorney. Like the conduct of all attorneys, Lauren's conduct is governed by rules of professional conduct established by the state in which she is licensed, and the Model Rules of Professional Conduct of​

Nguyen Imports, Inc., accuses Ogilvie, an accountant, of committing defalcation. This is​

The Sarbanes-Oxley Act applies only to domestic public accounting firms that provide auditing services to "issuers."​

Hadley, an accountant, accumulates working papers while performing an audit for Ilene. After the audit, these documents belong to​

Working papers are the documents through which a court orders an accountant to audit a public company.

A professional can be liable for constructive fraud only if he or she acted with fraudulent intent.

In some states, in the absence of privity, a party cannot recover from an accountant for negligence.

Kiana can be described as "a reasonably competent general practitioner of ordinary skill, experience, and capacity." This is the normal standard for judging the performance of​

Ezra, an accountant, intentionally misstates a material fact to mislead Fruit Packing, Inc., a client. Fruit Packing justifiably relies on the misstatement to its detriment. Ezra is most likely liable for​

An accountant is required to discover every impropriety, defalcation, and fraud in a client's books.

Beck is an accountant who prepares her clients' tax returns. Cole is not an accountant, but he also prepares tax returns for clients. Under the Internal Revenue Code, liability for preparing a false return may be imposed on​