Pat,an Accountant,includes a False Statement in a Report for Quantity,Inc

question 38

Multiple Choice

Pat,an accountant,includes a false statement in a report for Quantity,Inc.,that is filed with the Securities and Exchange Commis?sion.Quantity publishes a misleading ad about its future prospects.Rita sees the ad and calls Stan,who buys stock in Quantity.Under Section 18 of the Securities Ex?change Act of 1934,liability may attach to

• A)Pat's report.
• B)Quantity's ad.
• C)Rita's call.
• D)Stan's purchase.

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Definitions:

Principal

In agency law, a person who agrees to have another, called the agent, act on his or her behalf.

Agency Relationship

A legal and fiduciary relationship between two parties, where one (the agent) is authorized to act on behalf of the other (the principal) in business dealings.

Agent

A person who agrees to represent or act for another, called the principal.

Licensed Professional

An individual who has been officially authorized to perform certain specialized services or activities due to meeting specific governmental or professional standards.