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Unformatted text preview: Chapter 4 Tiffany Watt Assignment: A4 September 30, 2011 AC 405 E01 4-30. Place yes or no in the space provided for each of the following. Section 11 10b-5 1933 Act 1934 Act 1. material misstatement in the financial statements yes yes 2. a monetary loss occurred yes yes 3. lack of due diligence by the CPA no no 4. privity with the CPA no no 5. reliance on the financial statements no yes 6. the CPA had scienter no yes 4-31. Fill in the blank with the answer. Each answer in the list may be used more than once or not at all. 1.H 2.E 3.C 4.H 5.M 6.T 7.I 8.A 9.S 10.L 11.B 12.V 13.R 14.V 4-37. (a) Explain the privity defense. Blacks Law Dictionary defines privity as the connection or relationship between two parties, each having a legally recognized interest in the same subject matter. Only those parties displaying privity are allowed to initiate a legal action and have any chance of a successful lawsuit. No case of negligence can be brought against an auditor by a third party lacking privity. lawsuit....
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This note was uploaded on 02/02/2012 for the course BUSINESS 101 taught by Professor - during the Spring '11 term at Mississippi Valley State University.
- Spring '11