Galen Prepares a Financial Statement for Hobby Inc

question 16

Multiple Choice

Galen prepares a financial statement for Hobby Inc. before a public offering of its stock. The Securities and Exchange Commission orders a revision of the statement. During the subsequent delay of the offering, the stock price drops. Hobby files a suit against Galen for negligence. Galen's best defense is

• A)even if the accountant was negligent, this was not the proximate cause of the drop in the stock price.
• B)the firm suffered no injury.
• C)the accountant did not breach any duty of care that it owed to the firm.
• D)the accountant owed no duty of care to the firm.

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Definitions:

Environmental Protection

involves practices and policies aimed at preserving the natural environment from degradation and pollution, to ensure ecological health and sustainability.

Future Generations

The populace that will live and act in the coming times, inheriting the outcomes of present decisions.

Environmental Capital

Natural resources and ecological systems that provide vital goods and services to society, crucial for sustainability and health.

Natural Resources

Naturally occurring materials such as minerals, water, and fertile land that can be used for economic gain.