• Question 5 Hugh , CPA , has developed an opinion for which tax avoidance is a significant purpose that is marketed to potential investors . According to Treasury Department Circular 230
• Question 6 Under the liability provisions of Section 11 of the Securities Act of 1933 , a CPA who certifies financial statements included in a registration statement generally will not be liable to a purchaser of the security
• Question 7 Which of the following circumstances is a defense to an accountant ’ s liability under Section 11 of the Securities Act of 1933 for misstatements and omissions of material facts contained in a registration statement ?
• Question 8 A CPA partnership may , without being lawfully subpoenaed or without the client ’ s consent , make client workpapers available to
• Question 9 An accounting firm was hired by a company to perform an audit . The company needed the audit report in order to obtain a loan from a bank . The bank lent $ 500,000 to the company based on the auditor ’ s report . Fifteen months later , the company declared bankruptcy and was unable to repay the loan . The bank discovered that the accounting firm failed to discover a material overstatement of assets of the company . Which of the following statements is correct regarding a suit by the bank against the accounting firm ? The bank
• Question 10 In accordance with the AICPA Statements on Standards for Tax Services , if after having provided tax advice to a client there are legislative changes which affect the advice provided , the CPA
• Question 11 Alex Stone , CPA , prepared Ray Pym ’ s 2012 federal income tax return . Pym advised Stone that he had paid doctors ’ bills of $ 15,000 during 2012 , when in fact Pym had paid only $ 3,000 of bills . Based on Pym ’ s representations , Stone properly computed the medical expense deduction , with consequent understatement of tax liability of more than $ 5,000 . Pym ’ s total tax liability shown on the return was $ 40,000 . Stone had no reason to doubt the accuracy of Pym ’ s figures , although Stone did not request documentation for the expenses claimed ; but he was assured by Pym that sufficient