MULTIPLE CHOICE QUESTIONS

1. Which of the following, if present, would support a finding of constructive fraud on the part of a CPA?

a. Privity of contract

b. Intent to deceive

c. Reckless disregard

d. Ordinary negligence

2. Under the provisions of Sections 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, which of the following activities must be proven by a stock purchaser in a suit against a CPA?

I. Intentional conduct by the CPA designed to deceive investors

II. Negligence by the CPA

a. I only

b. II only

c. Both I and II

d. Neither I nor II

3. Under Section 11 of the Securities Act of 1933, a CPA usually will not be liable to the purchaser:

a. If the purchaser is contributorily negligent

b. If the CPA can prove due diligence

c. Unless the purchaser can prove privity with the CPA

d. Unless the purchaser can prove scienter on the part of the CPA

4. Under Section 11 of the Securities Act of 1933, which of the following must be proven by a purchaser of the security?

5. Quality control for a CPA firm, as referred to in Statements on Quality Control Standards, applies to:
a. Auditing services only
b. Auditing and consulting services
c. Auditing and tax services
d. Auditing and accounting and review services

6. Which of the following are elements of a CPA firm’s quality control that should be considered in establishing its quality control policies andprocedures?

Transcribed Image Text:

Independence Monitoring Client Acceptance Yes Yes Yes No Yes a. b. Yes C No d. Yes No Yes Yes Yes