Individuals who believe they relied on misstated financial statements to make a decision andhave suffered losses as a result will issue an action known as aa. Breach of contract.b. Tort.c. Securities litigation.d. Constructive fraud.

Individuals who believe they relied on misstated financial statements to make a decision andhave suffered losses as a result will issue an action known as aa. Breach of contract.b. Tort.c. Securities litigation.d. Constructive fraud.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Do some states allow creditors to engage in deception with the debtor to obtain the collateral if…

A: The term "creditors" refers to individuals or entities to whom money is owed by a debtor (the person…

Q: Provide correct solution

A: Step 1: Introduction to the Accounting EquationAn accounting equation serves as a basis for…

Q: What is the knowing misrepresentation of the truth in order to trick someone into entering into a…

A: Option a is correct.

Q: As a result of the recent mortgage crisis, many banks reported record losses to their mortgage…

A: 1.

Q: According to the AICPA Code of Professional Conduct, omitting material information on a financial…

A: According to the AICPA Code of Professional Conduct, omitting material information on a financial…

Q: Non-compliance does not include: a. Professional misconduct b. Personal misconduct c. Intentional…

A: Non compliance include: Professional misconduct Intentional errors and omissions by entity…

Q: What is the auditor's role when a client fails to follow the law?

A: This question explains about the auditor's role on a client fails to follow the law.

Q: Statement 1: lf a lawyer refuses to furnish corroborating information regarding litigation, claims,…

A: Solution: If a lawyer refuses to furnish corroborating information regarding litigation, claims, and…

Q: Bodily injury and property damage liability policies protect an insured for Loses for which the…

A: Bodily injury and property damage liability policies protects the insured when insured is at fault…

Q: Auditors may be held liable to both their clients and third parties under common law. a. What must…

A: An auditor has an obligation to their clients and third part to exercise due professional care.…

Q: If the chance that a risk will occur cannot be reasonably predicted or the possible financial loss…

A: An uninsurable risk is one that presents an unknown or unacceptable risk of loss for an insurance…

Q: e been misleading

A: Generally Accepted Accounting Principles refer to a systematic set of laws and policies used in…

Q: What does a third-party user of financial statements have to prove under common law in a suit…

A: The objective of this question is to understand what a third-party user of financial statements…

Q: Non-compliance does not include a. Professional misconduct b. Personal misconduct c. Unintentional…

A: Non-compliance means failure to comply with a rule.

Q: Under the Ultramares rule, to which of the following parties will an accountant be liable for…

A: The ultramares doctrine represents the ordinary negligence for liability to third party. It is…

Q: What are the main parts of an insurance contract and what are they designed to accomplish? How are…

A: Insurance is a contract between an individual or entity (the insured) and an insurance company (the…

Q: Some criticize the accounting profession for using expressions in the audit report that seem to be…

Q: Safety regulations are superior when an Injurer can escape paying damages by filing bankruptcy. True…

A: Bankruptcy Bankruptcy refers to the legal process where people who become insolvent or are not able…

Q: When investors sue auditors for damages under section 11 of the Securities Act of 1933,they must…

A: The Securities Exchange Act 1934: "The Securities Exchange Act 1934 controls everyday trading of…

Q: Explain the purposes of showing more or less profits by the fraudulent director.

A: Fraudulent directors may show more or less profits for a variety of purposes. One purpose is to…

Q: When a defendant debtor in a lawsuit is said to be “judgement proof” it signifies Multiple…

A: Introduction When a court ruling demands debt payback, a person is said to be judgment proof if they…

Q: Closing Entries On July 31, 2019, the balances of the accounts appearing in the ledger of Serbian…

A: The closing entries are prepared to close the temporary accounts of the business. The revenue and…

Q: If either party fails to perform their contractual obligations according to the contract terms, it…

A: Auditing refers to the examination of the financial records of a business organization to verify the…

Q: Q5. Distinguish between fraudulent financial reporting and misappropriation of assets. Discuss the…

A: 1) Fraudulent financial reporting - It is purposely done by the company to alter their financial…

Q: What elements does a plaintiff have to prove to be successful in a case against a negligent…

A: In the case of negligence if the plaintiff wants to sue the defendant for damages incurred…

Q: 3.An important development in the area of breach of contract by an auditor is contributory…

A: Contributory Negligence In simple contributory Negligence which describes as negligence in the part…

Q: It refers to the right of mortgagor to redeem the mortgaged property after his default of the…

A: The question is related to the choose the correct option for the given statement. Redemption means…

Q: The refusal of a clientâ€™s attorney to provide the information requested in an inquiry letter is…

A: The refusal of a client is attorney to provide the information requested in an inquiry letter is…

Q: 26-is an act of willfully making misrepresentation of financial information by one or more…

A: The question is multiple choice question. Required ..............Is an act of willfully making…

Q: An attorney may impeach an opposing party’s witness by showing/proving that the witness: A. Has been…

A: An attorney may impeach an opposing party’s witness by 5 ways: 1. witness has made prior…

Q: Which of the following is NOT a client protection principle? a. Methods that prevent client of…

A: Clients protection principles are very important in financial and loans.

Q: What is the ethical value of applying the Fraud Triangle to assess the risk of material…

A: Fraud Triangle: A fraud triangle refers to a framework that is used in auditing to explain the…

Q: If a lawyer refuses to furnish corroborating information regarding litigation, claims, and…

A: The correct answer is: (C) consider the refusal to be a scope limitation. The auditor would…

Q: 37. Which of the following is accurate with respect to litigation involving CPAs? a. A CPA will not…

A: Litigation involving CPAs can arise from a variety of situations, including alleged negligence,…

Q: What are three categories of employee fraud? Which is mostcommon? Which is associated with the…

A: Employee fraud: It refers to the situation where an employee of the organization intentionally…

Concept explainers

Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.

Question

Individuals who believe they relied on misstated financial statements to make a decision and
have suffered losses as a result will issue an action known as a
a. Breach of contract.
b. Tort.
c. Securities litigation.
d. Constructive fraud.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Accounting for Current liabilities, Provisions and Contingencies

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

a.) Identify the purposes or applications of the Statute of Frauds.A purpose of the Statute of Frauds is to ensure that contracts formed for fraudulent purposes are preserved in writingb.)outline the penalties for committing fraud in certain kinds of contractsc.)enforce the full execution of oral contractsd.)prevent one party from falsely claiming that a contract was formed in certain areas of exchange
What does a third-party user of financial statements have to prove under common law in a suit against an auditor for the auditor's negligence? Explain each item with an example
1) Using the categories included in the professional standards, inappropriately and intentionally failing to expense expired amounts of the prepaid insurance is an example of a)misappropriation of assets. b)other illegal acts. c)fraudulent financial reporting. d)direct effect illegal act 2)A financial statement audit should be designed to obtain reasonable assurance that the financial statements are free of material misstatement due to: a)misappropriation of assets only. b)fraudulent financial reporting only.c)neither fraudulent financial reporting nor misappropriation of assets. d)both fraudulent financial reporting and misappropriation of assets
observers of the accounting profession suggest that many courts attempt to "socialize" investment losses by extending auditors liability to third party financial statement users. discuss the benefits and costs of such a policy to public accounting firms, audit clients, and third party financial statement users such as investors and creditors. in your view should the courts have the authority to socialize investment losses
What types of actions may an auditor be liable to a client under common law? Why would the clients prefer to sue the auditor for tort action rather than a breach of contract?
When creditors who relied on an entity’s audited financial statements suffer monetary lossesafter a customer (the auditors’ client) goes bankrupt, what must the plaintiff creditors in alawsuit for damages show in a court that follows the doctrine in Credit Alliance?a. The auditors knew and specifically acknowledged identification of the creditors.b. The auditors could reasonably foresee them as beneficiaries of the audit because entitiessuch as this client use financial statements to obtain credit from vendors.c. The plaintiffs were foreseen users of the audited financial statements because they werevendors of long standing.d. All of the above
Under sales on credit, the supplier-customer relationship may be terminated under the law in the following situation except: Select one:a. Death of the customer b. Liquidation or bankruptcy of the customerc. Mental incapacity of the customer or personal guarantor d. Legal suits/litigation commenced against the customer
Generally, the auditor could be legally liable under? Select one: a. contract law but not under the tort of negligence to third parties b. the tort of negligence to the client and contract law c. the tort of negligence but not contract law to the client d. contract law to third parties and to the client
Which action is not considered an act discreditable to the accounting profession? a) Being finally determined by a court of competent jurisdiction to have violated any of the federal antidiscrimination laws. b) Having a bank collect notes received from a client in payment of fees. c) Failing to follow standards and procedures established by governmental agencies in audits of grants by those agencies. d) Negligently permitting another to sign a document containing materially false and misleading information.
Which of the following actions would be considered as self-interest threats?Select which option is correct: a. An auditor has no potential employment with an assurance client. b. A member of the assurance team is a director of the client. c. An auditor acts as an advocate on behalf of an assurance client. d. One client provides a high percentage of total audit fees.
When an employee is in a position to detect and hide fraudulent activity, incompatible obligations exist. False or True?
Sir please help me