As Part of a Stock Offering for Design Studio Corporation

question 48

Multiple Choice

As part of a stock offering for Design Studio Corporation, the firm's accountant Eve intentionally misrepresents material facts in the prospectus. Fred buys the stock unaware of the misrepresentation and suffers a loss. Eve may be subject to​

• A) ​none of the choices.
• B) ​job termination but no other sanctions, penalties, or liability.
• C) ​a fine, imprisonment, and damages.
• D) ​professional censure but no criminal sanctions or civil liability.

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Definitions:

Validity

When a scale measures what it’s supposed to measure.

Valid Test

A test that accurately measures what it is intended to measure, demonstrating reliability and relevance to the specific purpose for which it is used.

Barnum Effect

The tendency for people to believe vague, positive statements about themselves.

Intercoder Reliability

Occurs when people coding stories or written material agree, using a set of rules, that it meets certain criteria.