4 Dec 2018

Fill in the blank with the answer. Each answer in thelist may be used more than once or not at all.

a.Separate and proportionate

b.Racketeer Influenced and Corrupt Organization Act (RICO)

c.Foreign Corrupt Practices Act



f.Reasonable professional care

g.Gross negligence

h.Securities Act of 1933

i.Compensatory damages


k.Criminal victim compensation

l.Punitive damages




p.Near privity



s.Constructive fraud

t.Breach of contract

u.Joint and severally

v.Securities Exchange Act of 1934

_____1.A federal statute used for legal action related to theinitial offering of securities to the public by a company.

_____2.Absence of the level of care that an auditor owes toanother party that has privity with the auditor.

_____3.Prior to SOX, the first federal statute requiringcompanies to have a functioning internal control system.

_____4.The federal statute that does not require the plaintiffto prove that he or she relied on the financial statements to beable to obtain a judgment against the auditor.

_____5.A case that established that fraud on the part of theauditor is required for an injured party to collect damages under10b-5 of the 1934 Act.

_____6.Cause of action which plaintiffs without privity have notbeen successful at using to obtain the remedy of specificperformance.

_____7.A judgment for the return of the loss the plaintiffexperienced.

_____8.Liability theory that is now used for federal civil casesagainst accountants and auditors based on the Private SecuritiesLitigation Reform Act of 1995.

_____9.When a state law does not specify the concept of grossnegligence, this is the legal concept that is likely used.

_____10.The motivation for a plaintiff to allege grossnegligence.

_____11.Can result in treble damages.

_____12.Typically requires the auditor to commit fraud beforethere will be a finding and judgment against the auditor.

_____13.Often a part of the process of discovery.

_____14.Requires that the offending party’s behavior must havebeen intentional (scienter).

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Jean Keeling
Jean KeelingLv2
6 Dec 2018

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