[Unaudited Financial Statements] ABC Company Hires Abe, an Accountant, to Create

question 10

Multiple Choice

[Unaudited financial statements] ABC Company hires Abe, an accountant, to create financial statements. Abe creates the financial statements without using general accounting procedures and clearly marks the statements as "unaudited".
-Could Abe be liable for the contents of the financial statements?

• A) Yes, because he did not follow GAAP.
• B) Yes, but only for the areas of the document that did not include GAAP.
• C) Yes, because he was negligent.
• D) No, because accountants are not liable for the contents of unaudited financial statements.
• E) No, if he inserted a broad and general disclaimer on the financial statements.

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Definitions:

Distinction

The recognition of a difference or the quality of being excellent and standing out from others.

Anorexia Nervosa

A severe eating disorder characterized by an extreme fear of gaining weight and a distorted body image leading to self-starvation and excessive weight loss.

Maladaptive

Referring to behaviors or thinking patterns that are counterproductive or inhibit one's ability to adjust healthily to particular situations.

Eating Disorder

A range of psychological disorders characterized by abnormal or disturbed eating habits, which can significantly impair health or social functioning.