CPAnet Forum: Becker CPA Liability Question

Active Topics

Memberlist

Help

REG STUDY GROUP
CPAnet Forum : REG STUDY GROUP

Topic: Becker CPA Liability Question (

Topic Closed)

Author

Message

<< Prev Topic | Next Topic >>

CPA2011
Newbie
Newbie

Joined: 29 May 2010
Online Status: Offline
Posts: 49

Posted: 13 Nov 2011 at 18:47 \| IP Logged

Becker has contradicting answers on two questions on the PassMaster related to CPA negligence liability. Can anyone clarify the following for me?

To prove a CPA negligence liability, must a client or a third party prove reliance? Becker says yes/no? Please help!

__________________
FAR 05/10   87
BEC 07/10   85
AUD 08/10   93
REG 10/10   64, 74, 84

divyagovil1
Major Contributor

Joined: 30 Jan 2009
Location: India
Online Status: Offline
Posts: 1456

Posted: 14 Nov 2011 at 05:14 \| IP Logged

I remember this confusion quite well when I was studying
for REG.

Refer the following post:
http://www.cpanet.com/cpa_forum/forum_posts.asp?
TID=24693&KW=constructive+fraud&PN=0&TPN=1

Hope it helps you if the rules haven't changed in 2 years !

__________________
Divya - CO State

Passed using Becker Review :
FAR - 04/11/09 - 94
BEC - 05/30/09 - 86
REG - 08/29/09 - 95
AUD - 11/21/09 - 92
Ethics - 2011

tho9504
Regular
Regular

Joined: 25 Nov 2009
Location: United States
Online Status: Offline
Posts: 196

Posted: 16 Nov 2011 at 11:06 \| IP Logged

i may be wrong but for the 1933 act section 11, one dont have to prove reliance but 34 act you need to prove reliance:

1933: Duty of care existed, Breached that duty, The breach was the cause of Harm/injury.

1934: Purchased securities based on Accountant's opinion, You were unaware of the mistatement before purchase, You relied(Reliance) on the audited statement to purchase, Scienter on part of the accountant.

CPA#1
Major Contributor

Joined: 01 Dec 2009
Online Status: Offline
Posts: 439

Posted: 16 Nov 2011 at 13:55 \| IP Logged

It depends.

Ordinary Negligence- No
Gross Negligence- Yes, you must prove reliance.

__________________
FAR: 52,66,73,61,89
AUD: 47,87
BEC: 80
REG: 64,74,84

DONE!!!!!!!

Sorry, you can NOT post a reply.
This topic is closed.

Printable version

You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot delete your posts in this forum
You cannot edit your posts in this forum
You cannot create polls in this forum
You cannot vote in polls in this forum