Gold, CPA, Rendered an Unqualified Opinion on the Financial Statements

question 8

Multiple Choice

Gold, CPA, rendered an unqualified opinion on the financial statements of Eastern Power Company. Egan purchased Eastern bonds in a public offering subject to the Securities Act of 1933. The registration statement filed with the SEC included the audited financial statements. Gold is being sued by Egan under Section 11 of the Securities Act of 1933 for the misstatements contained in the financial statements. To prevail, Egan must prove

• A) Neither scienter nor reliance.
• B) Reliance but not scienter.
• C) Scienter but not reliance.
• D) Both scienter and reliance.

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Definitions:

Cultural Relativism

Cultural relativism is the principle that an individual human's beliefs and activities should be understood by others in terms of that individual's own culture.

Ethnocentrism

is the belief in the inherent superiority of one's own ethnic group or culture, often accompanied by a devaluation of other cultures.

Cultural Production

The creation, dissemination, and consumption of goods and services that reflect and reinforce a society's values, beliefs, and practices.

Globalization

The process by which businesses, cultures, and societies become interlinked and integrated due to advances in transportation, communication, and technology.