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Burt, CPA issued an unqualifed opinion on an finan...

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Burt, CPA issued an unqualifed opinion on an financial statement of Midwest Corp. These financail statements were included in Midwests annual report, and Form 10K was filed with the SEC. As a result of Burts reckless disregarded for GAAS material misstatements in the financial statements were not detected. Subsequenetly, Davis purchased stock in Midwest in the secondary market without ever seeing Midwests annual report or Form 10K. Shortly thereafter, Midwest became insolvent and the price of the stock declined drastically. Davis sued Burt for damages based on Section 10(b) and Rule 10b-5 of the securities exchange act of 1934, Burts best defense os that A) there has been no subsequent sale for which a loss can be computed B) Davis did not purchase the stock as part of an initial offering C) Davis did not rely on the financial statements or Form 10-K D)Davis was not in pivity wit Burt

 

Paper#6266 | Written in 18-Jul-2015

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