A CPA May Be Liable to Any Purchaser of a Security

question 43

Multiple Choice

A CPA may be liable to any purchaser of a security if the CPA issued a clean opinion on materially misstated financial statements.The CPA usually will not be liable to the purchaser ________.

• A)if the purchaser is guilty of contributory negligence
• B)if the CPA can prove due care in the audit
• C)unless the purchaser can prove privity with the CPA
• D)unless the purchaser can prove scienter on the part of the CPA

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Definitions:

Defibrillator

A medical device that delivers a dose of electrical energy to the heart to treat life-threatening cardiac dysrhythmias.

Ventricular Fibrillation

A life-threatening heart rhythm that results in rapid, erratic electrical impulses, causing the ventricles to quiver ineffectively.

Palpitations

Unusually rapid, strong, or irregular pulsations of the heart.

Concussion

A traumatic brain injury caused by a blow to the head or body, leading to temporary loss of normal brain function.