One of the greatest sources of liability for auditors under the 1934 Act is Section 10(b) and the related Rule 10b-5, which states that it is unlawful for any person to defraud, make any untrue statement of a material fact, or engage in any act in connection with the purchase or sale of a security. Once a plaintiff has established that he or she can sue under Rule 10b-5, there are four elements that must be proven. List the four elements.
What will be an ideal response?
1. A material, factual misrepresentation or omission.
2. Reliance by the plaintiff on the financial statements.
3. Damages suffered as a result of reliance on the financial statements.
4. Scienter-intent to deceive, manipulate, or defraud (this has also included gross negligence or reckless behavior in some courts).
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Which of the following is not true about computerized accounting systems?
A) Include authorization controls before a transaction can be completed B) Computer accounting systems require less internal controls. C) The computer screen is often designed to make a specific transaction easy to input. D) The database is updated once the transaction is submitted, making it easy to run updated reports.
If Rudy offers Oscar $200 for his laptop valued at $600 and Oscar agrees, a court will probably:
a. set aside the agreement as being unfair. b. set aside the agreement because the consideration is inadequate. c. not set aside the agreement based on the adequacy of the consideration. d. not set aside the agreement because of the UCC.
Which of the following is characteristic of fee simple absolute ownership?
A) It is infinite in duration. B) It is the highest form of ownership. C) It does not end upon the happening of some event. D) It can be willed and inherited. E) All of the above
The U.S. Supreme Court's holding in Wards Cove Packing v. Atonio A)differed from the holding in Griggs v. Duke Power Co. partly because the Court was more conservative at the time Wards Cove was decided
B)upheld the ruling in Griggs v. Duke Power Co. C)found that overt racial discrimination existed. D)set forth a "business necessity" requirement for employment hiring practices.