Under the Antifraud Provisions of Section 10(b)of the Securities Exchange

question 20

Multiple Choice

Under the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934, a CPA may be liable if the CPA acted:

• A)negligently.
• B)with independence.
• C)without due diligence.
• D)without good faith.

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Definitions:

Salary Allowance

A fixed amount or benefit often added to an employee's salary, such as for travel or housing.

Capital Balance

The amount of money that shareholders have contributed to a company plus retained earnings or minus accumulated losses.

Net Income

What a business financially gains in the end, after subtracting expenses and taxes from its initial revenue.

Capital Balances

Capital balances refer to the amount of money that the owners or partners have invested in a business, not including any profits or losses that the business may earn or incur.