Under Rule 10b-5 of the Securities Act of 1934, _____

question 19

Multiple Choice

Under Rule 10b-5 of the Securities Act of 1934, _____.

• A) the plaintiff must prove that the accountant acted with scienter
• B) the intent to deceive is not an element of the offense
• C) an accountant will never be liable to a purchaser for a misstatement of material fact in the registration statement
• D) an accountant must prove he exercised due diligence to escape liability

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Definitions:

Standard Overhead

The fixed amount of overhead costs that are expected to be incurred under normal operating conditions.

Volume Variance

The difference between the budgeted volume of production or sales and the actual volume, impacting costs or revenue.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels, providing a more useful tool for performance evaluation compared to a static budget.