[BigCom Securities] A&Z and DCB,two Large Accounting Firms,prepared Registration Statements

question 23

Multiple Choice

[BigCom Securities] A&Z and DCB,two large accounting firms,prepared registration statements for BigCom,a large,public company,and provided information on BigCom to the SEC.A&Z's statements contained several misrepresentations about BigCom's securities.Wallace,BigCom's Chairman of the Board of Directors,signed the statements prior to the SEC filing.As is the usual procedure,Wallace signed the statements but did not read them carefully.He heard there were some questionable issues about the quality of the statements,but he felt confident with the expertise of the large accounting firms.Subsequently,purchasers of BigCom claimed there were misrepresentations about BigCom's shares in the statements filed with the SEC,and sued A&Z,DCB,and Wallace.All three defendants deny liability.
-Would DCB likely be held liable for the misrepresentations in the statements filed with the SEC?

• A)Yes,unless DCB can prove the misrepresentation did not involve a material fact.
• B)No,because it was not a willful violation.
• C)Yes,based on a balancing test.
• D)No,because the misrepresentations were made by A&Z and an accounting firm cannot be held liable for something it did not do.
• E)Yes,unless DCB can prove it performed a due diligence inquiry.

Comprehend the role of information technology in optimizing supply chain processes.

Evaluate the impact of logistical decisions on cost-effectiveness and customer satisfaction.

Understand customer requirements and their influence on supply chain decisions.

Recognize the ethical and practical implications of supply chain and logistics management practices.

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Definitions:

Machine Setups

The process of configuring or preparing machinery for a particular job, task, or production run.

Variable Cost

Expenses that change in proportion to the level of goods or services produced, such as raw materials or direct labor costs.

High-Low Method

A technique used in managerial accounting to estimate fixed and variable costs based on the highest and lowest levels of activity.

Electricity

A form of energy resulting from the existence of charged particles, used as a power source.