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Ch 51 1. The liability of professionals is based on solely on statutory law 2. With respect to negligence, an accountant is subject to no greater standard of care than the average reasonable person 3. An accountants violation of GAAP and GAAS is prima facie evidence of negligence 4. Compliance with GAAP and GAAS relieves an accountant of liability for negligence. 5. If an accountant is hired to prepare an unaudited financial statement, he or she may be liable for failing to delineate the statements as unaudited. 6. A professionals failure to perform a duty, with reckless disregard of the consequences, constitutes actual fraud 7. A professional who intentionally misstates a material fact to mislead a client may be liable for actual fraud 8. A professional whose client justifiably relies on the professionals misstatement may be liable for constructive fraud. 9. An accountant who prepares a financial statement for a client, knowing that the client will use the statement to obtain a loan, can be liable to the lender 10. Some jurisdictions hold accountants liable to users whose reliance on the accountants statement was reasonably foreseeable 11. An accountants liability under the Securities Act of 1933 does not require privity of contract with the 11.... View Full Document

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