The Rosenblum Case Ruling Was of Concern to the Accounting

question 21

Multiple Choice

The Rosenblum case ruling was of concern to the accounting profession because it implied that

• A) Full joint and several liability would be reinstated
• B) All possible third party users of financial statements must be anticipated
• C) The concept of contractual privity would no longer be important
• D) Financial liability would occur when scienter was a factor

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Definitions:

Unconscionable

Describes actions or terms that are so unjust or overwhelmingly one-sided that they are considered contrary to fair play.

Public Policy

Guidelines and principles that reflect the societal values and interests which guide lawmakers and government actions.

Statute Violation

An act that breaks a specific statute law, which can be either a criminal or civil law, established by a legislative body.

Exculpatory Clause

A contract provision that releases one party from liability for harm or damages that might arise under the agreement.