Under common law, in general, the client must prove the following to establish CPA liability: •
Duty
—the CPA accepted a duty to exercise skill, prudence, and diligence. Breach of duty—the CPA breached that duty. Loss—the client suffered a loss. Causation—the loss resulted from the CPA's negligent performance.
Which of the following pairs of elements must a client prove to hold an accountant liable for common law negligence?
1. Which of the following pairs of elements must a client prove to hold an accountant liable for common law negligence? Common law negligence requires the client to
prove the elements of breach of duty of care and damages (loss) among other elements
.
Which of the following is necessary for a client to prove in order to recover damages from an auditor?
Under common law, in general, the client must prove the following to establish CPA liability: •
Duty
—the CPA accepted a duty to exercise skill, prudence, and diligence. Breach of duty—the CPA breached that duty. Loss—the client suffered a loss. Causation—the loss resulted from the CPA's negligent performance.
Which of the following is something that the plaintiff must prove in order for an accountant to be liable for damages under Section 10 B and Rule 10b 5 of the Securities Exchange Act of 1934?
Correct! Under the anti-fraud provisions of the Securities Act of 1933, a plaintiff must prove three elements:
A loss was suffered, the audited financial statements were included in the prospectus, and a material misstatement or omission was contained therein
.
Which of the following would be the auditors most likely defense in an action brought under the Securities Exchange Act of 1934?
which of the following would be the auditors' most likely defense in an action brought under the Securities Exchange Act of 1934?
the auditors acted in good faith and are not aware of the materially misstated financial statements.
What are the 4 types of negligence?
- Gross Negligence. Gross Negligence is the most serious form of negligence and is the term most often used in medical malpractice cases. …
- Contributory Negligence. …
- Comparative Negligence. …
- Vicarious Negligence.
What are the five elements of negligence?
Doing so means you and your lawyer must prove the five elements of negligence:
duty, breach of duty, cause, in fact, proximate cause, and harm
. Your lawyer may help you meet the elements necessary to prove your claim, build a successful case, and help you receive the monetary award you deserve.
Which of the following pairs of elements must a client prove to hold an accountant?
Which of the following pairs of elements must a client prove to hold an accountant liable for common law fraud? Possible Answers:
Scienter and justifiable reliance
. Intent to deceive and perjury.
What needs to be proven in order to find an accountant liable for negligence explain the four elements?
In order to establish negligence, you must be able to prove four “elements”:
a duty, a breach of that duty, causation and damages
.
What are the criminal liabilities of an auditor?
- For False Records. …
- For False Statement. …
- For Willful Default. …
- For furnishing false Income. …
- For False report. …
- Indian Penal Code.
What is diligence defense?
A defense
available to a party or entity that is accused of registering false or misleading statements
with the SEC, if the party or entity signed off on the statements after conducting a reasonable investigation of a company's financial health.
Which of the following statements best describes the primary purpose of statements on Auditing Standards SASs )?
Which of the following statements best describes the primary purpose Statements of Auditing Standards (SASs)? This is the primary purpose of SASs.
Establish standards, rather than procedures
. Auditing interpretations are interpretive publications and are recommendations for applying ASSA in specific situations.
What is the legal term that refers to intent or knowledge of wrongdoing?
Mens rea
, Latin for “guilty mind” is the legal term for the intention or knowledge of wrongdoing that constitutes part of a crime, as opposed to the action or conduct of the accused.
Which of the following parties is most likely to recover against auditors for losses resulting from acts of ordinary negligence?
Which of the following parties is most likely to recover against auditors for losses resulting from acts of ordinary negligence?
The auditors' client
.
Which of the following procedures would a CPA most likely perform during the planning stage of the audit?
Which of the following procedures would a CPA most likely perform during the planning stage of the audit?
Evaluate the reasonableness of management's allowance for doubtful accounts
. Determine areas where there is a higher risk of material misstatement. Evaluate the significance of uncorrected misstatements.
What are some examples of negligence?
- A driver who runs a stop sign causing an injury crash.
- A store owner who fails to put up a “Caution: Wet Floor” sign after mopping up a spill.
- A property owner who fails to replace rotten steps on a wooden porch that collapses and injures visiting guests.
