Bailey CPA,audited Lincoln Corporation

question 34

Multiple Choice

Bailey CPA,audited Lincoln Corporation.The shareholders sued both Lincoln and Bailey for securities fraud under the Federal Securities Exchange Act of 1934.The court determined that there was securities fraud and that Lincoln was 80% at fault and Bailey was 20% at fault due to her negligence in the audit.Both Lincoln and Bailey are solvent and the damages were determined to be $2 million.What is the maximum liability of Bailey?

• A)$0
• B)$400,000
• C)$1,000,000
• D)$2,000,000

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Definitions:

Inherently Dangerous

Activities or substances that, by their nature, pose a potential risk of harm or damage even when reasonable care is taken.

Strict Liability

A legal principle that holds a party responsible for damages or losses, regardless of fault or intent.

Regulated Activity

Actions or operations subject to oversight and control by governmental or authoritative bodies to ensure compliance with laws and regulations.

Duty to Aid

The legal or moral obligation to provide assistance to a person in distress, under certain circumstances, without causing harm to oneself.