There was no intent to deceive, manipulate, or defraud shareholders. The Act of 1934 does not apply.

B. There was no intent to deceive, manipulate, or defraud shareholders. A. The Act of 1934 does not apply. The shareholders have taken legal action against the CPAs under the Securities Exchange Act of 1934. Which of the following is the best defense? A. The Act of 1934 does not apply. B. There was no intent to deceive, manipulate, or defraud shareholders. C. The engagement letter specifically disclaimed liability to any third party. D. The CPA was not in privity to the shareholders. ANSWER: B NOTES: REF: 31. Which of the following best describes a trend in litigation involving CPAs? A. A CPA cannot render an opinion on a company unless the CPA has audited all affiliates of that company. B. A CPA may successfully assert as a defense that the CPA had no motive to be part of a fraud. C. A CPA may be exposed to criminal as well as civil liability. D. A CPA is primarily responsible for a client”s footnotes in an annual report filed with the SEC. ANSWER: C NOTES: REF: 32. Which

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