A CPA Issued an Unqualified Opinion on the Financial Statements

question 40

Multiple Choice

A CPA issued an unqualified opinion on the financial statements of a company that sold common stock in a public offering subject to the Securities Act of 1933. Based on a misstatement in the financial statements, the CPA is being sued by an investor who purchased shares of this public offering. Which of the following represents a viable defense?

• A) The investor has not proven CPA negligence.
• B) The investor did not rely upon the financial statement.
• C) The CPA detected the misstatement after the audit report date.
• D) The misstatement is immaterial in the overall context of the financial statements.

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Definitions:

United States Reporter

An official publication of United States Supreme Court decisions.

Citation

A reference to a legal source, such as a case, statute, or regulation, or the act of issuing a formal notice for a violation.

Dissenting Opinions

Refers to the opinions written by one or more judges in a court who disagree with the majority's decision.

Persuasive Authorities

Legal sources that, while not binding, can influence or guide a court's decision in legal proceedings.