Jones,CPA,is in Court Defending Himself Against a Lawsuit Filed Under

question 53

Multiple Choice

Jones,CPA,is in court defending himself against a lawsuit filed under the 1933 Securities Act.The charges have been filed by purchasers of securities covered under that act.If the purchasers prove their required elements,in general,Jones will have to prove that:

• A)He is not guilty of gross negligence.
• B)He performed the audit with good faith.
• C)He performed the audit with due diligence.
• D)The plaintiffs did not show him to be negligent.

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Definitions:

Spending Variance

The difference between the budgeted amount of spending and the actual amount spent.

Actual Cost

The real, total expenses incurred for a project or production, including all direct and indirect costs.

Plane Operating Costs

The expenses associated with the operation of an aircraft, including fuel, maintenance, crew salaries, and depreciation.

Measures of Activity

Quantitative techniques or metrics used to assess the level of activity or operations within a business or process.