Which of the Following Is an Accurate Statement Regarding Recent

question 106

Multiple Choice

Which of the following is an accurate statement regarding recent actions brought against accountants by clients and third parties?

• A)Litigants will first seek state remedies because of the availability of class-action litigation.
• B)Gross negligence by the auditor must be proven under the Securities Acts of 1933 and 1934.
• C)The greatest growth in CPA liability litigation bas been under the federal securities laws.
• D)The amount of damages that plaintiffs can receive is greater under common law than under the federal securities laws.

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Definitions:

Bankruptcy Estate

All legal and equitable interests of the debtor in property at the time of the bankruptcy filing, as defined by bankruptcy law.

Prepetition Assets

Assets that a debtor possesses before filing for bankruptcy protection, which are generally subject to evaluation and potentially used to satisfy creditor claims in the bankruptcy process.

Federal Bankruptcy Exemptions

Legal provisions that allow individuals declaring bankruptcy to retain a portion of their property from creditors.

Federal Bankruptcy Exemptions

Provisions in U.S. federal law that allow an individual filing for bankruptcy to keep certain property from being seized by creditors.