Exam 51: Professional Liaility and Accountability

With respect to negligence, an accountant is subject to no greater stan?dard of care than a person who is not a accountant.

If a third party will be affected by a contract, the parties to the contract are in privity with the third party.

Doug is an accountant whose clients include Everyday Products, Inc. (EPI). Under the Ultramares rule, if Doug is negligent in his work for EPI, he could be liable to

An accountant's liability under the Securities Act of 1933 re?quires privity of contract with the purchaser of a security.

Leslie, an accountant, enters into a contract to provide services to Marty. Leslie does not finish the work within the contract's deadline. Leslie is

An accountant's violation of generally accepted accounting principles is prima facie evidence of negligence.

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

Bertha is an accountant with Consumer Sales Corporation. Doral buys Consumer stock and loses money on the investment. To recover from Bertha under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 of the Se?curities and Exchange Commission, Doral must prove

A professional's failure to perform a duty, with reckless disregard of the conse?quences, constitutes actual fraud.

Pace is an attorney, whose clients include Quikfeet Running Shoes Company. Unless Quikfeet has violated securities law, the contents of Pace's file on Quikfeet may be disclosed to someone other than Quikfeet

Gen?erally ac?cepted auditing standards represent guidelines rather than standards of care.

An accountant's liability under the Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 re?quires privity of contract.

Boris is an accountant. Under the Sarbanes-Oxley Act of 2002, the degree of government oversight over the public accounting practices of Boris and other accountants was

An accountant can avoid liability by proving that his or her negligence was only the proximate cause of the cli?ent's loss.

A qualified opinion must be specific and identify the reason for the qualification.

A professional cannot be liable for fraud in the absence of fraudulent intent.

A professional owes a duty to his or her client to honor the terms of their contract.

At common law, professionals may be liable to clients for negli?gence.

Under the Restatement (Second) of Torts, accountants can be held li?able for negligence to any third parties.

An opinion that disclaims any liability for false or misleading financial statements is too general.