If a Stockholder Sues a CPA for Common Law Fraud

question 74

Multiple Choice

If a stockholder sues a CPA for common law fraud based on false statements contained in the financial statements audited by the CPA,which of the following,if present,would be the CPA's best defense?

• A)The stockholder lacked privity to sue.
• B)The false statements were immaterial.
• C)The CPA did not financially benefit from the alleged fraud.
• D)The client contributed to the negligence.

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Definitions:

Corporate Social Responsibility

A business model that involves companies integrating social and environmental concerns in their operations and interactions with their stakeholders.

Prevailing Societal Norms

The dominant principles, standards, or behaviors that are accepted and practiced within a society.

Obstructionist Strategy

A business tactic where a company deliberately impedes or obstructs efforts, such as regulatory compliance or lawsuits, often to protect its own interests.

Social Responsibility

The ethical framework that suggests an entity, be it an organization or individual, has an obligation to act for the benefit of society at large.