R5

Question 0

What are the penalties for a CPA who intentionally violated the provisions of section 10 B of the Securities Exchange Act of 1934

Answer 0

Civil liability of monetary damages and criminal liability of a fine

Question 1

When is it allowable to make oral offers to sell shares?

Answer 1

Immediately after filing the registration statement

Question 2

What securities are exempt from filing under the 1933 act

Answer 2

BRINGS: banks and Savings and Loan’s, railroad securities, insurance policie,s not-for-profit organizations, government and short-term commercial paper with a maturity date of nine months or less

Question 3

What are the four elements of negligence?

Answer 3

Duty of care, breach, causality, and injury

Question 4

Majority Rule

Answer 4

Accountants are liable to anyone in a class such as potential lenders are investors of third parties from the CPA knows will rely on the opinion of the financial statements

Question 5

Successful action under section 11 the securities act of 1933 requires…

Answer 5

1. The plaintiff acquired the security 2. In the registration statement was either defendants misstatement of a material fact with the defendants omission of material fact and 3. The Plaintiff suffered a loss

Question 6

What defense is available to an accountant under section 18 of the securities exchange act of 1934 for false or misleading statements

Answer 6

Good faith and lack of knowledge of the statements falsity

Question 7

Under regulation D of the securities act of 1933, what is the maximum time During which an exempt offering may be made?

Answer 7

12 months

Question 8

Rule 506 of regulation D requirements:

Answer 8

No general solicitations, buyers right to resell is limited to two years, limited to 35 nonaccredited investors

Question 9

A taxpayer can generally avoid penalties if:

Answer 9

They acted in good faith, if there was a reasonable basis to support the tax position, and if the taxpayer did not have willful neglect