Homework week 7businesslaw - statement that the accounting...

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Homework week 7 For some reason I cannot open the ebook anymore. So I purchased a used book to finish the class. That is why I am only posting the answers. Answers: 41.2 – The notes are not securities. Ernest and Young did not violated any rules under Secuirty Exchange Act of 1934, the notes are not securities. 41.7 – Insider trading is not illegal is the employee did not used the privilege information to purchase or sell the stocks. Now I believe this is very difficult to proof that an employee especially with a position as Hoodes did not had this privilege information. Anyways, I believe Hoodes would win. He sold the stocks while employed by the company, and insider trading is not illegal. 51.5 – No there was no mutual interest between the accounting firm and the client. There was no
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Unformatted text preview: statement that the accounting method was changed nor the information on the financial statements were enhance. Now under the Foreseeability standard, yes the CPA firm is liable since the shares were purchased based on the information provided after the auditor prepared the financial statements. 51.7 – There is confidentiality but there are also some exceptions, if an accountant is subpoena this confidentiality is no longer valid. Also if the accountant feels that to avoid a subpoena should provide this information to a government agency. I believe the accountant should of waited for the IRS to request this information. Wait for the subpoena and then provide the information requested, not to volunteer the information. Roberts would win....
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This note was uploaded on 10/28/2011 for the course B LAW b law taught by Professor Blaw during the Spring '11 term at Keller Graduate School of Management.

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