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Listed below are sources of law and legal situations. For each of the situations, indicate the law that applies. Note: You may use the law that applies more than once. Legal Situations Law 1. The client files a lawsuit against the CPAs for negligence in the performance of tax services. 2. A stockholder sustains a loss when he purchases 100 shares of stock in a public company (issuer) from another stockholder in reliance upon audited financial statements included in Form 10-K. 3. A bank loses money that it loaned to an issuer in reliance upon financial statements filed with the SEC. 4. An initial purchaser of bonds of an issuer sustains a loss. 5. A CPA is criminally prosecuted for willingly allowing misstatements in a client's financial statements contained in a registration statement. 6. The initial purchaser of common stock of an issuer sustains a loss. 7. A quarterly statement (10-Q) of a client is materially misstated. B. Compiled financial statements of a nonpublic company are discovered to include material misstatements. 9. Form S-1 includes material misstatements of the audited financial statements. 10. Accounting related consulting services resulted in a system that misstated income of a nonpublic company