third party decided to file suit against the CPA , it would most likely be filed under
• Question 4 Dexter and Co ., CPAs , issued an unqualified opinion on the 2012 financial statements of Bart Corp . Late in 2010 , Bart determined that its treasurer had embezzled over $ 1,000,000 . Dexter was unaware of the embezzlement . Bart has decided to sue Dexter to recover the $ 1,000,000 . Bart ’ s suit is based upon Dexter ’ s failure to discover the missing money while performing the audit . Which of the following is Dexter ’ s best defense ?
• 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