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:

Price Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good, expressed as a percentage change.

Demand

The quantity of a product or service consumers are willing and able to purchase at various price levels.

Convenience Store Products

Items sold in convenience stores, often including snacks, beverages, tobacco products, and household essentials.

Gas Sales

Transactions involving the purchase and sale of gas, either in its natural form or after processing, typically for the purpose of energy production or heating.