Identify Whether the Following Statements Could Result in Actionable Fraud

question 53

Essay

Identify whether the following statements could result in actionable fraud and why or why not.
a. A statement by an art dealer to a potential buyer, "I think this painting is underpriced because the artist is now gaining national recognition."
b. A vacuum cleaner salesperson's statement, "This machine is the best available for the cost."
c. A city councilman's statement to a fellow councilman that, "If we vote for that action, the resulting consolidation will be illegal."

Appreciate the procedural aspects of criminal law, especially regarding preliminary hearings, grand juries, and arraignment.

Recognize the differences between various types of punishment and their intended effects, such as special deterrence, probation, and cruel and unusual punishments.

Grasp the significance of legal standards such as reasonableness in judicial decisions, including sentencing and appeals.

Understand the protections against self-incrimination and the rights to free speech and privacy under the U.S. Constitution.

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Definitions:

Direct Method

An accounting approach where costs are directly traced to objects, such as products or services, without using cost drivers or allocation bases.

Cost of Goods Sold

The direct expenses tied to the production of goods sold by a company, including the cost of the materials and labor directly used to create the good.

Direct Method

A way of preparing the cash flow statement where actual cash flow information from the company's operations is used, instead of being derived from the income statement.

Cost of Goods Sold

The expenses directly tied to the manufacturing of the products a company sells, including labor and materials.