Paula Performed the Audit of the Financial Statements of Abdul

question 29

Multiple Choice

Paula performed the audit of the financial statements of Abdul Company (a nonpublic entity currently not subject to filing requirements under the Securities Act of 1933 or Securities Exchange Act of 1934) .Abdul Company is currently considering several alternatives for raising capital,including seeking financing from area banks or an initial public offering of its securities.Which of the following parties would have the lowest likelihood of successfully bringing suit for ordinary negligence against Paula?

• A)Abdul Company.
• B)Purchasers of Abdul Company's securities in an initial public offering.
• C)First State Bank,a bank with whom Abdul Company has not previously done business.
• D)Simon Whitaker,a private investor who is considering acquiring Abdul Company.

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Definitions:

Ego

In psychoanalytic theory, the component of the personality that is responsible for dealing with reality while balancing the demands of the id and superego.

Superego

The component of the personality in Freudian psychology that is responsible for moral standards and ideals.

Self-Defeating Behavior

Actions or attitudes that undermine one's own success, often resulting from low self-esteem or self-worth.

Behavior Therapy

A form of psychotherapy focused on changing negative behaviors through conditioning and reinforcement techniques.