Which of the following is least likely to be considered a security under the Securities Act of 1933?
A. General partnership interests.
B. Limited partnership interests.
C. Stock options.
D. Warrants.
A
Which of the following transactions is subject to registration requirements of the Securities Act of 1933?
A. The public sale by a corporation of its negotiable 10-year notes.
B. The public sale by a charitable organization of 10-year bearer bonds.
C. The
A
Which of the following is not a security under the definition for the Securities Act of 1933?
A. Any note.
B. Bond certificate of interest.
C. Debenture.
D. All of the above are securities under the Act.
D
Sandy Corporation is considering the following issuances:
I. Notes with maturities of three months to be used for commercial purposes and having a total aggregate value of $500,000.
II. Notes with maturities of two years to be used for investment purposes
A
Sam, a Harlingen business owner, sues a local shopping mall, accusing it of conspiring with a former partner of Sam's to put Sam out of business. Sam lacks resources to pay his lawyers and otherwise fund the lawsuit. Sternberg forms Plaintiff's Funding Co
B
Under the Securities Exchange Act of 1934, which of the following types of instruments is excluded from the definition of "securities"?
A. Investment contracts.
B. Convertible debentures.
C. Non-convertible debentures.
D. Certificates of deposit.
D
Which of the following is a "security" for federal securities law purposes?
A. Shares of corporate stock.
B. Limited-partnership interests.
C. Fractional undivided interests in oil.
D. All of the above.
D
Which of the following transactions is subject to registration requirements of the Securities Act of 1933?
A. The public sale of stock of a trucking company regulated by the Interstate Commerce Commission.
B. A public sale of municipal bonds issued by a c
D
Which of the following is least likely to be considered a security under the Securities Act of 1933?
A. Stock options.
B. Warrants.
C. General partnership interests.
D. Limited-partnership interests.
C
Alliance Leasing Corp. locates and recruits more than 1,500 investors from all over the U.S. to invest in an enterprise that uses investor money to buy commercial office or kitchen equipment, that was then leased out to third-party lessees. Investors' fun
A
According to the Securities Act of 1933, which of the following statements is correct regarding an issuer of securities?
A. All securities issuers must provide potential investors with a prospectus containing specified information.
B. An issuer is permitt
D
Under the Securities Act of 1933, subject to some exceptions and limitations, it is unlawful to use the mails or instruments of interstate commerce to sell or offer to sell a security to the public unless
A. A surety bond sufficient to cover potential lia
C
Acme Corp. intends to make a public offering in several states of 250,000 shares of its common stock. Under the Securities Act of 1933,
A. Acme must sell the common stock through licensed securities dealers.
B. Acme must, in all events, file a registratio
D
With regard to an offering of common stock requiring registration under the Securities Act of 1933,
A. The SEC will attempt to pass on the investment value of the common stock before approving the offering.
B. The registration statement is automatically e
D
One of the clients of Sherman & Pryor, CPAs, plans to form a limited partnership and offer to the public in interstate commerce 2,000 limited partnership units at $5,000 per unit. Which of the following is correct?
A. The dollar amount in question is suff
B
Unless an exemption applies to an offering of securities, the Securities Act of 1933 requires preparation and filing of a
Registration statement, Prospectus
A. Yes, Yes
B. Yes, No
C. No, Yes
D. No, No
A
After the filing of the registration statement with the SEC but prior to the effective date, the underwriter is allowed to do which of the following?
I. Make oral offers to sell the security
II. Issue a preliminary prospectus ("red herring")
A. I only.
B.
C
Under the Securities Act of 1933, the registration of securities which are offered to the public in interstate commerce is
A. Directed toward preventing the marketing of securities which pose serious financial risks to the prospective investor.
B. Not req
D
The registration requirements of the Securities Act of 1933 are intended to provide information to the SEC to enable it to
A. Evaluate the financial merits of the securities being offered.
B. Ensure that investors are provided with adequate information on
B
Under the Securities Act of 1933, which of the following statements is(are) correct regarding the purpose of registration?
I. The purpose of registration is to allow for the detection of management fraud and prevent a public offering of securities when ma
B
Donn & Co. is considering the sale of $11 million of its common stock to the public in interstate commerce. In this connection, Donn has been correctly advised that registration of the securities with the SEC is
A. Not required if the states in which the
D
Under the Securities Act of 1933, which of the following statements most accurately reflects how securities registration affects an investor?
A. The investor is provided with information on the stockholders of the offering corporation.
B. The investor is
B
Which of the following requirements must be met by an issuer of securities who wants to make an offering by using shelf registration?
Original registration
*statement must be kept updated
*The offer must be a first-time issuer of securities
A. Yes, Yes
B.
B
Universal Corp. intends to sell its common stock to the public in an interstate offering that will be registered under the Securities Act of 1933. Under the Act,
A. Universal can make offers to sell its stock before filing a registration statement, provid
D
Non-WKSI issuer World Corp. wants to make a public offering of its common stock. On May 10, World prepares and files a registration statement with the SEC.
On May 20, World places a "tombstone ad," announcing that it was making a public offering.
On May 2
A
Which of the following statements concerning the prospectus required by the Securities Act of 1933 is correct?
A. The prospectus is a part of the registration statement.
B. The prospectus should enable the SEC to pass on the merits of the securities.
C. T
A
A preliminary prospectus, permitted under SEC regulations, is known as the
A. Unaudited prospectus.
B. Qualified prospectus.
C. "Blue-sky" prospectus.
D. "Red herring" prospectus.
D
When a common stock offering requires registration under the Securities Act of 1933,
A. The registration statement is automatically effective when filed with the SEC.
B. The issuer would be acting unlawfully if it were to sell the common stock without pro
B
Under the Securities Act of 1933, which of the following statements is (are) correct regarding the purpose of registration?
I. The purpose of registration is to allow the detection of management fraud and prevent a public offering of securities when manag
B
A tombstone advertisement
A. May be substituted for the prospectus under certain circumstances.
B. May contain an offer to sell securities.
C. Notifies prospective investors that a previously offered security has been withdrawn from the market and is ther
D
Non-WKSI issuer World Corp. wanted to make a public offering of its common stock. On May 10, World prepares and files a registration statement with the SEC.
On May 20, World places a "tombstone ad," announcing that it was making a public offering. On May
D
Which of the following disclosures must be contained in a non-WKSI issuer's securities-registration statement filed under the Securities Act of 1933?
A. A list of all existing stockholders.
B. The principal purposes for which the offering proceeds will be
B
The registration requirements of the Securities Act of 1933 are intended to provide information to the SEC to enable it to
A. Evaluate the financial merits of the securities being offered.
B. Ensure that investors are provided with adequate information on
B
Eldridge Corporation is seeking to offer $7,000,000 of securities under Regulation D of the Securities Act of 1933. Which of the following is (are) true if Eldridge wants an exemption from registration under the Securities Act of 1933?
I. Eldridge must co
D
An offering made under the provisions of Regulation A of the Securities Act of 1933 requires that the issuer
A. File an offering circular with the SEC.
B. Sell only to accredited investors.
C. Provide investors with the prior four years' audited financial
A
Under Regulation D of the Securities Act of 1933, which of the following conditions apply to private placement offerings? The securities
A. Cannot be sold for longer than a six-month period.
B. Cannot be the subject of an immediate unregistered reoffering
B
Taso Limited Partnership intends to offer $400,000 of its limited partnership interests under Rule 504 of Regulation D of the Securities Act of 1933. Which of the following statements is correct?
A. The exemption under Rule 504 is available to an issuer o
A
Imperial Corporation wishes to sell securities and thereby raise $6 million without filing a registration statement. Which of the following would be the most promising avenue for Imperial, given that it would like to use general solicitation?
A. Rule 504
D
Regulation D's definition of an "accredited investor" does not include which of the following categories?
A. High-wealth individuals
B. High-income individuals
C. Elected federal politicians
D. Issuer insiders
C
Toby fancies himself an expert in the new crowdfunding rules (Regulation CF). He has made four statements about it, but only one of them is true. Which is it?
A. Toby says that the original ceiling on crowdfunding in a 12-month period was $50 million.
B.
C
Which of the following is true regarding the Regulation A exemption?
A. An unlimited amount of money may be raised in a 12-month period by firms complying with Reg A requirements.
B. General solicitation is forbidden under Reg A.
C. Reg A issuers need not
D
The Salmon Croquette Corporation (SCC) is investigating an offering under Rule 147A. Which of the following will its lawyers learn once they have completed their research?
A. SCC will not be allowed to use Rule 147A if it is an investment company.
B. SCC
A
Which of the major transaction exemptions enables an issuing firm to test the waters before actually holding an offering?
A. Rule 506
B. Rule 504
C. Regulation A
D. Rule 147A
C
Which of the following is accurate regarding the crowdfunding exemption, Reg CF?
A. Reg CF has purchaser qualifications.
B. Reg CF requires investors to invest through intermediaries.
C. Reg CF has a ceiling of $50 million that can be raised in a 12-month
B
Exemption from registration under the Securities Act of 1933 would be available for
A. Promissory notes maturing in 12 months.
B. Securities of a bank.
C. Limited partnership interests.
D. Corporate bonds.
B
Which of the following is a security which is exempt from the registration requirements of the Securities Act of 1933?
A. Warrants to purchase preferred stock.
B. Convertible, subordinated debentures issued by a manufacturing company.
C. Common stock with
D
The Securities Act of 1933 specifically exempts from registration, securities offered by any person
A. Other than an issuer, underwriter, or dealer.
B. Who is an issuer of a public offering.
C. If the securities in question have previously been registered
A
The Securities Act of 1933 provides an exemption from registration for
*Bonds issued by a municipality for governmental purposes
* Securities issued by a not-for-profit charitable organization
A. Yes, Yes
B. Yes, No
C. No, Yes
D. No, No
A
Which of the following securities is exempt from registration under the Securities Act of 1933?
A. Municipal bonds.
B. Securities sold by a discount broker.
C. Preincorporation stock subscriptions.
D. One-year notes issued to raise working capital.
A
Under Regulation D of the Securities Act of 1933, what is the maximum time period during which an exempt offering may be made?
A. Three months.
B. Six months.
C. Twelve months.
D. Twenty-four months.
C
Hamilton Corporation is making a $4.5 million securities offering under Rule 504 of the Securities Act of 1933. Under this regulation, Hamilton is
A. Required to provide full financial information to accredited investors only.
B. Allowed to make the offer
D
Walpole Corporation is considering making an offering without filing a registration statement with the SEC pursuant to Regulation A. Which of the following is not true regarding Reg A?
A. No information is required to be provided to investors.
B. General
A
Kamp is offering $10 million of its securities for sale. Under Rule 506 of Regulation D of the Securities Act of 1933:
A. The securities may be debentures.
B. Kamp must be a corporation.
C. There must be more than 35 purchasers.
D. The securities may be r
A
Sloban Corporation wishes to raise a lot of money without filing a registration statement with the SEC. It is interested in knowing more about Rule 506 of Regulation D. Which of the following is true?
A. Firms may raise up to $50 million in a 12-month per
C
Noxious Corporation is located in Idaho and wishes to sell securities to Idaho residents without filing a registration statement. Noxious would like to know more about the difference between Rule 147 and Rule 147A. Which of the following is not the same u
C
Dizzle Corporation is just starting out and has heard about Regulation Crowdfunding. The company's officers wish to know which of the following is true about the regulation:
A. The maximum amount that can be raised in a 12-month period is $5 million.
B. G
C
Pix Corporation needs to raise $7.5 million within the next 12 months. It wishes to do so without filing a registration statement with the SEC. It will need to raise money in more than one state. Which of the following is the best option for Pix?
A. Rule
B
Which of the following securities is exempt from registration under the Securities Act of 1933?
A. Municipal bonds.
B. Securities sold by a discount broker.
C. Pre-incorporation stock subscriptions.
D. One-year notes issued to raise working capital.
A
Which of the following transactions is subject to registration requirements of the Securities Act of 1933?
A. The public sale by a corporation of its negotiable ten-year notes.
B. The public sale by a charitable organization of 10-year bearer bonds.
C. Th
A
Under the Securities Act of 1933, the registration of an interstate securities offering is
A. Required only in transactions involving more than $500,000.
B. Mandatory, unless the cost to the issuer is prohibitive.
C. Required, unless there is an applicabl
C
Which of the following securities is exempt from the registration requirements of the Securities Act of 1933?
A. Common stock with no par value.
B. Warrants to purchase preferred stock.
C. Bonds issued by a charitable foundation.
D. Convertible debentures
C
Winslow, Inc. intends to make a $450,000 common-stock offering under Rule 504 of Regulation D of the Securities Act of 1933. Winslow
A. Must make the offering through a general advertising.
B. Must provide all investors with a prospectus.
C. May sell the
C
Which of the following securities would be regulated by the provisions of the Securities Act of 1933?
A. Securities issued by not-for-profit, charitable organizations.
B. Securities guaranteed by domestic governmental organizations.
C. Securities issued b
D
Under the Securities Act of 1933, an accountant may be held liable for any materially false or misleading financial statements, including an omission of a material fact therefrom, provided the purchaser
A. Proves reliance on the registration statement or
D
A requirement of a private action to recover damages for violation of the registration requirements of the Securities Act of 1933 is that
A. The plaintiff has acquired the securities in question.
B. The issuer or other defendants commit either negligence
A
One of the elements necessary to recover damages if there has been a material misstatement in a registration statement filed pursuant to the Securities Act of 1933 is that the
A. Issuer and plaintiff be in privity of contract with each other.
B. Issuer fa
C
To be successful in a civil action under Section 11 of the Securities Act of 1933 concerning liability for a misleading registration statement, the plaintiff must prove
Defendant's intent to deceive, Plaintiff's reliance on the registration statement
A. Y
D
Under the liability provisions of Section 11 of the Securities Act of 1933, a CPA may be liable to any purchaser of a security for certifying materially misstated financial statements that are included in the security's registration statement.
Under Secti
D
Dart Corp. engages Jay Associates, CPAs, to assist in a public-stock offering. Jay audits Dart's financial statements and gives an unqualified opinion, despite knowing that the financial statements contain misstatements. Jay's opinion is included in Dart'
C
Ivor and Associates, CPAs, audit the financial statements of Jaymo Corporation.
As a result of Ivor's negligence in conducting the audit, the financial statements include material misstatements.
Ivor was unaware of this fact. The financial statements and
B
Quincy buys Teal Corp. common stock in an offering registered under the Securities Act of 1933. Worth & Co., CPAs, give an unqualified opinion on Teal's financial statements, which were included in the registration statement filed with the SEC.
Quincy sue
B
Petty Corp. makes a public offering subject to the Securities Act of 1933.
In connection with the offering, Ward & Co., CPAs renders an unqualified opinion on Petty's financial statements included in the SEC registration statement. Huff purchases 500 of t
C
While conducting an audit, Larson Associates, CPAs, fails to detect material misstatements included in its client's financial statements. Larson's unqualified opinion was included with the financial statements in a registration statement and prospectus fo
C
Under the liability provisions of Section 11 of the Securities Act of 1933, a CPA may be liable to any purchaser of a security for certifying materially misstated financial statements that are included in the security's registration statement.
Under Secti
B
Under Section 11 of the Securities Act of 1933, which of the following standards may a CPA use as a defense?
Generally accepted accounting principles.
Generally accepted detection standards.
A. Yes, Yes
B. Yes, No
C. No, Yes
D. No, No
B
In which of the following types of action, brought against a CPA who issues an audit report containing an unqualified opinion on materially misstated financial statements, may a plaintiff prevail without proving reliance on the audit report?
A. An action
C
Under the liability provisions of Section 11 of the Securities Act of 1933, a CPA who certifies financial statements included in a registration statement generally will not be liable to a purchaser of the security
A. Unless the purchaser can prove sciente
C
Craven was the CEO of Engines Plus, Inc., a publicly traded company. Hanson, CPA, was the longtime controller for the company. Engines Plus was about to be sued in a class action suit for defective engines. Only Craven knew about the impending suit. On Ma
C
Dean, Inc., a publicly traded corporation, paid a $10,000 bribe to a local zoning official. The bribe was recorded in Dean's financial statements as a consulting fee. Dean's unaudited financial statements were submitted to the SEC as part of a quarterly f
C
The Securities Exchange Commission promulgated Rule 10b-5 under Section 10(b) of the Securities Exchange Act of 1934. Which of the following is (are) purpose(s) of the Act?
To rate
* securities so investors can choose more wisely
* To encourage disclosure
B
Which of the following factors, by itself, requires a corporation to comply with the reporting requirements of the Securities Exchange Act of 1934?
A. Six hundred employees.
B. Shares listed on a national securities exchange.
C. Total assets of $2 million
B
The registration provisions of the Securities Exchange Act of 1934 require disclosure of all of the following information except the
A. Names of owners of at least 5% of any class of nonexempt equity security.
B. Bonus and profit-sharing arrangements.
C.
A
Which of the following persons is not an insider of a corporation subject to the Securities Exchange Act of 1934 registration and reporting requirements?
A. An attorney for the corporation.
B. An owner of 5% of the corporation's outstanding debentures.
C.
B
The Securities Exchange Commission promulgated Rule 10b-5 from power it was given the Securities Exchange Act of 1934. Under this rule, it is unlawful for any person to use a scheme to defraud another in connection with the
* Purchase of any security
* Sa
A
The antifraud provisions of Rule 10b-5 of the Securities Exchange Act of 1934
A. Apply only if the securities involved were registered under either the Securities Act of 1933 or the Securities Exchange Act of 1934.
B. Require that the plaintiff show negli
C
Link Corp. is subject to the reporting provisions of the Securities Exchange Act of 1934.
Which of the following situations would require Link to be subject to the reporting provisions of the 1934 Act?
* Shares listed on a national securities exchange
* M
B
Link Corp. is subject to the reporting provisions of the Securities Exchange Act of 1934.
Which of the following documents must Link file with the SEC?
Quarterly reports (Form 10-Q), Proxy Statements
A. Yes, Yes
B. Yes, No
C. No, Yes
D. No, No
A
Link Corp. is subject to the reporting provisions of the Securities Exchange Act of 1934. Which of the following reports must also be submitted to the SEC?
*Report by any party making a tender offer to purchase Link's stock
*Report of proxy solicitations
A
Adler, Inc. is a reporting company under the Securities Exchange Act of 1934. The only security it has issued is voting common stock. Which of the following statements is correct?
A. Because Adler is a reporting company, it is not required to file a regis
C
Which of the following is correct concerning financial statements in annual reports (Form 10-K) and quarterly reports (Form 10-Q)?
A. Both Form 10-K and Form 10-Q must be audited by independent public accountants and both must be filed with the SEC.
B. Bo
C
Burk Corporation has issued securities that must be registered with the Securities Exchange Commission under the Securities Exchange Act of 1934. A material event took place yesterday, that is, there was a change in the control of Burk Corporation. Which
B
Under the Sarbanes-Oxley Act which of the following officers must periodically certify that reports comply fully with relevant securities laws and also fairly present the financial condition of company in all material aspects?
A. The chairman of the board
C
Which of the following statements is correct with respect to the registration requirements of the Securities Exchange Act of 1934?
A. They require issuers of nonexempt securities traded on a national securities exchange to register with the SEC.
B. They p
A
The Securities Exchange Act of 1934 requires that certain persons register and that the securities of certain issuers be registered. In respect to such registration under the 1934 Act, which of the following statements is incorrect?
A. All securities offe
A
Which of the following persons is not an insider of a corporation subject to the Securities Exchange Act of 1934 registration and reporting requirements?
A. The president.
B. A member of the board of directors.
C. A shareholder who owns 8% of the outstand
D
Tulip Corp. is a registered and reporting corporation under the Securities Exchange Act of 1934. As such it
A. Can offer and sell its securities to the public without the necessity of registering its securities pursuant to the Securities Act of 1933.
B. C
C
Which of the following statements is(are) correct concerning issuers of securities registered under the Securities Exchange Act of 1934?
I. The issuers must have each Form 10-K audited by an independent public accountant.
II. The issuers must have each Fo
A
Wane Corporation has issued securities that are traded on a national securities exchange. Wane just had a significant change in its assets due to a large acquisition of real property. Which of the following is true?
A. Wane must file Form 10-K with the SE
B
Under the provisions of the Securities Exchange Act of 1934, a corporation whose common stock is listed on a national stock exchange
A. Is prohibited from making private placement offerings.
B. Must submit Form 10-K to the SEC except in those years in whi
D
Which of the following is required under the Securities Exchange Act of 1934 or the SEC's reporting requirements issued pursuant thereto?
A. Current reporting by issuers of registered securities of certain specified corporate and financial events within 4
A
The provisions of the Securities Exchange Act of 1934
A. Do not require distribution of an annual report unless proxies are solicited.
B. Require the distribution of financial statements prior to or concurrent with a proxy solicitation.
C. Apply only to t
B
Which of the following statements concerning the scope of Section 10(b) of the Securities Exchange Act of 1934 is correct?
A. In order to come within its scope, a transaction must have taken place on a national stock exchange.
B. It applies exclusively to
D
Which of the following provisions of the Securities Exchange Act of 1934 applies despite the fact that a corporation's securities are exempt from registration?
A. The antifraud provisions.
B. The provisions dealing with the filing of periodic and annual r
A
Rey Corp.'s management intends to solicit proxies relating to its annual meeting at which directors will be elected. Rey is subject to the registration and reporting requirements of the Securities Exchange Act of 1934. As a result, Rey must furnish its sh
D
Which of the following statements is correct with respect to the Securities Exchange Act of 1934?
A. Issuers whose securities are registered under the Act are required to comply with its reporting requirements.
B. The Act applies only to issuers whose sec
A
Dice, Inc. is a reporting company under the Securities Exchange Act of 1934. The only security Dice issued is voting common stock. With regard to Dice's proxy solicitation requirements, which of the following statements is correct?
A. Dice must file its p
A
If securities are registered under the Securities Exchange Act of 1934, which of the following disclosure provisions apply?
*Notice of sales of the registered securities by the corporation's officers must be filed with the SEC
*Proxy material for the regi
C
Tweed Manufacturing, Inc. plans to issue $10 million of common stock to the public in interstate commerce after its registration statement with the SEC becomes effective. What, if anything, must Tweed do in respect to those states in which the securities
B
Under Section 12 of the Securities Exchange Act of 1934, in addition to companies whose securities are traded on a national exchange, what class of companies is subject to the SEC's continuous disclosure system?
A. Companies with annual revenues in excess
D
What is the standard that must be established to prove a violation of the antifraud provisions of Rule 10b-5 of the Securities Exchange Act of 1934?
A. Negligence.
B. Intentional misconduct.
C. Criminal intent.
D. Strict liability.
B
What is the standard that must be established to prove a violation of the anti-fraud provisions of Rule 10b-5 of the Securities Exchange Act of 1934?
A. Negligence.
B. Intentional misconduct.
C. Criminal intent.
D. Strict liability.
B
An accountant will be liable for damages under Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 only if the plaintiff proves that
A. The accountant was negligent.
B. There was a material omission.
C. The security involved was registered
B
Dart Corp. engages Jay Associates, CPAs, to assist in a public stock offering. Jay audits Dart's financial statements and gives an unqualified opinion, despite knowing that the financial statements contain misstatements.
Jay's opinion is included in Dart'
A
Which defense must an accountant establish to be absolved from civil liability under Section 18 of the Securities Exchange Act of 1934 for false or misleading statements made in reports or documents filed under the Act?
A. Lack of gross negligence.
B. Exe
C
Ted buys Synchotic Corporation shares based on Synchotic's announcement of record earnings. But just a few days later, on July 1, 2010, Synchotic admits that its earnings had been artificially inflated via fraudulent earnings management. Its stock price d
D
Under the anti-fraud provisions of Section 10(b) of the Securities Exchange Act of 1934, a CPA may be liable if the CPA acts
A. Negligently.
B. With independence.
C. Without due diligence.
D. Without good faith.
D
A CPA firm issues an unqualified opinion on financial statements not prepared in accordance with GAAP. The CPA firm will have acted with scienter in all the following circumstances, except where the firm
A. Intentionally disregards the truth.
B. Has actua
C
Under the liability provisions of Section 18 of the Securities Exchange Act of 1934, for which of the following actions would an accountant generally be liable?
A. Negligently approving a reporting corporation's incorrect internal financial forecasts.
B.
C
Dart Corp. engaged Jay Associates, CPAs, to assist in a public-stock offering. Jay audits Dart's financial statements and gives an unqualified opinion, despite knowing that the financial statements contain misstatements.
Jay's opinion is included in Dart'
C
For a CPA to be liable for damages under the anti-fraud provisions of Section 10(b) and rule 10b-5 of the Securities Exchange Act of 1934, a plaintiff must prove all of the following, except that
A. The plaintiff relied on the financial statements audited
B
Which of the following might prevent a plaintiff investor from recovering from a defendant accountant in a Section 18(a) lawsuit?
A. The document containing the false statement was not filed with the SEC.
B. The plaintiff did not read the false document.
D
Under the Section 10(b) Rule 10b-5 antifraud provisions of the Securities Exchange Act of 1934, which of the following conditions must a plaintiff prove to recover damages from an accountant?
A. The plaintiff is in privity of contract with the accountant.
B
Under the Securities Exchange Act of 1934, which of the following penalties could be assessed against a CPA who intentionally violated the provisions of Section 10(b), Rule 10b-5 of the Act?
Civil liability of monetary damages, Criminal liability of a fin
A
Willful violations of which of the following acts can create the basis for federal criminal liability?
A. The 1933 Securities Act.
B. The 1934 Securities Exchange Act.
C. A and B.
D. None of the above.
C
Seimone, an auditor for the ABC accounting firm, learns that her audit client, Bupkis Co., is about to announce a record profit. She buys Bupkis shares in a fake name and profits upon the public announcement. Which of the following is true?
A. The SEC may
A
Turtle was audit partner on ABC Accounting's audit of Jemison Corporation. Turtle knew that the audit was ineptly performed, although he hoped (without much reason) that the financial statements were accurate. He certified them as such. Which of the follo
A
Under the Securities Exchange Act of 1934, which of the following penalties could be assessed against a CPA who intentionally violates the provisions of Section 10(b), Rule 10b-5 of the Act?
Civil liability of monetary damages.
Criminal liability of a fin
A
CPA Sobel engages in insider trading of the shares of an audit client. She is caught. The SEC brings a civil action and forces Sobel to give up her insider-trading profits and pay a civil fine of three times the amount of the profits. Sobel thought she ha
B
The Federal Unemployment Tax Act
A. Imposes a tax on all employers doing business in the US.
B. Requires contributions to be made by the employer and employee equally.
C. Permits the employer to take a credit against the federal tax if contributions are m
C
For the entire year 1, Ral Supermarket, Inc. conducted its business operations without any permanent or full-time employees. Ral employed temporary and part-time workers during each of the 52 weeks in the year. Under the provisions of the Federal Unemploy
B
In general, which of the following statements is correct with respect to unemployment compensation?
A. An employee who is unable to work because of a disability is entitled to unemployment compensation.
B. An individual who has been discharged from employ
B
Taxes payable under the Federal Unemployment Tax Act (FUTA) are
A. Partially deductible by the covered employee for federal income tax purposes.
B. Calculated as a fixed percentage of all compensation paid to an employee.
C. Payable by all employers regar
D
Juan recently started operating a flower shop as a proprietorship. In its first year of operations, the shop had a taxable income of $60,000. Assuming that Juan had no other employment-related earnings,
A. The flower shop must withhold FICA taxes from Jua
B
The Model Bakery Corporation (MBC) has not been withholding and remitting its federal taxes as it should have. The federal government is considering suing some of MBC's employees under 26 U.S.C. Sec. 6672 in order to hold them personally liable to pay the
C
The Blazing Saddles Corporation (BSC) is covered by the Federal Unemployment Tax Act (FUTA). Several of its workers have left BSC lately. Which one of the next workers is entitled to collect unemployment compensation benefits from BSC?
A. Toddrick had wor
A
Newton just joined ABC Corporation and has come to you for advice regarding the Federal Insurance Contributions Act (FICA), which will be an area of responsibility for him in his new position. Please tell Newton which of the following is true.
A. To be "f
C
Taxes payable under the Federal Unemployment Tax Act (FUTA) are
A. Partially deductible by the covered employee for federal income-tax purposes.
B. Calculated as a fixed percentage of all compensation paid to an employee.
C. Payable by all employers, rega
D
The Federal Unemployment Tax Act (FUTA)
Requires both the employer and employee to pay
A. FUTA taxes, although the amounts to be paid by each are different.
B. Does not apply to businesses with fewer than 35 employees.
C. Does not apply to employers that
D
An employer having an experience unemployment tax rate of 3.2% in a state having a standard unemployment tax rate of 5.4% may take a credit against a 6.2% federal unemployment tax rate of
A. 3.0%
B. 3.2%
C. 5.4%
D. 6.2%
C
An unemployed CPA would generally receive unemployment compensation benefits if the CPA
A. Was fired as a result of the employer's business reversals.
B. Refused to accept a job as an accountant while receiving extended benefits.
C. Was fired for embezzli
A
Unemployment tax payable under the Federal Unemployment Tax Act (FUTA), is
A. Payable by all employers.
B. Deducted from employee wages.
C. Paid to the Social Security administration.
D. A tax-deductible employer's expense.
D
For the entire year of 2016, Ral Supermarket, Inc. conducts its business operations without any permanent or full-time employees.
Ral employs temporary and part-time workers during each of the 52 weeks in the year.
Under the provisions of the Federal Unem
B
Taxes payable under the Federal Unemployment Tax Act (FUTA) are
A. Calculated as a fixed percentage of all compensation paid to an employee.
B. Deductible by the employer as a business expense for federal income-tax purposes.
C. Payable by employers for a
B
Which of the following is typically not a medical care expense that may be deducted if the taxpayer meets the applicable threshold?
A. Payment for diagnosis of disease.
B. Payment for treatment of disease.
C. Payment for prevention of disease.
D. Payment
D
Which of the following individuals are not required to purchase health insurance coverage under the ACA?
A. Indian tribal members
B. People in prison
C. Individuals making only $9,000 per year
D. All of the above.
D
Under his health care plan, Tran has a deductible of $1,200, a coinsurance of 20%, and an out-of-pocket limit that matches the federal maximum of $6,850 (in 2016). Tran has significant surgery for which his bill is $5,000, hospitalization for which his bi
D
The ABC Co. has 75 full-time employees. It does not offer any health insurance to those employees, some of whom buy insurance policies from the ACA Marketplace and qualify for federal subsidy. What is its annual penalty under the ACA's employer mandate?
A
D
Income from which of the following is (are) deemed unearned income for purposes of the ACA's Medicare surtax on unearned income?
A. Stocks
B. Bonds
C. Capital gains
D. All of the above
D
If a married couple filing jointly has active income of $220,000 and net investment income of another $200,000, how much must they pay to satisfy their Medicare surtax obligation?
A. $420,000
B. $15,960
C. $6,460
D. $7,600
C
In 2019, thirty-something Tessa had an AGI of $75,000. She had some severe dental problems and paid her dentist $10,000 that was not covered by insurance. How much may Tessa deduct from her income tax form under the ACA?
A. $10,000
B. $7,500
C. $2,500
D.
C
Which of the following professions might well be deemed statutory employees under the proper circumstances?
A. Lumberjacks.
B. Welders.
C. Farmers.
D. Life insurance agents.
D
ABC Co. is preparing to hire five new workers. It wishes to designate them as independent contractors rather than employees. Which of the following reasons might explain that choice?
A. ABC would not be liable under Title VII if any of them were sexually
D
Tim works alongside three other workers at ABC Co. They all do the same work. They all work 8-5 most days and are required to work occasionally in the evening or on a weekend. They are all paid on an hourly basis. The other three workers are labeled and t
C
TUV Company owns a tall office building. Once every two months for many years, the Quixotic Window Washing Co. (QWW) has sent its workers to the building to wash its windows using QWW's equipment. In return, TUV pays QWW $1,000 bi-monthly. One time, one o
D
Tilly's roof was damaged in a hail storm. She went on line, read the reviews, and hired Ahmad's Roofing Co. (ARC) to fix her roof, agreeing to pay $2,500 for the job. Ahmad sent its best worker, Shanline, over to work on Tilly's roof. This was a relativel
C
LMN Corporation classified many of its workers as independent contractors, but that classification became the subject of litigation and was determined to be erroneous. Which of the following does not support a safe harbor defense for LMN?
A. An opinion fr
A
XYZ Corporation classified large numbers of its workers as independent contractors, but in litigation brought by the IRS, the court held that they were actually employees who had been deprived of their rightful benefits. Which of the following is likely t
C