[jeff]

Welcome to the Q4 2016 CPA Exam Study Group for REG.

If this is your first post in the study group – please post your target exam date (just the time frame to preserve your anonymity), and your past history with this exam (optional, of course).

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[jonm857]

from memory

subpoena
diclosure to comply with gaap/gaas
to allow a prospective purchaser to review, but not to turn over
quality review panel
in defense of a lawsuit brought by client
ethics investigation from the AICPA??

B - 81
A - 87
R - 73
F - July 5th

[Reg_Slayer]

subpoena (jon and jp got it)
Surviving member of the firm.
Quality control panel. (jon got it)
AICPA/State Trial Board. (jon got it)
Court proceedings (jon got it)

[Reg_Slayer]

Difference between normal fraud and constructive fraud?

[jonm857]

@reg_slayer

if you go to page R5-43 in the text, it has the items listed and there are some differences in your list.

For instance, the text does not have “surviving member of the firm”.
It also has GAAP/GAAS disclosures, but your list doesn't.

I remember the problem you got that from because I did it earlier today, but there are some differences in these two lists that need to be resolved.

B - 81
A - 87
R - 73
F - July 5th

[jonm857]

scienter – actual fraud
recklessness – constructive fraud

B - 81
A - 87
R - 73
F - July 5th

[jonm857]

@suzieemac

I believe you are right about the terminable interest. I still need to look that chapter over so unfortunately cannot offer a lot of help here.

B - 81
A - 87
R - 73
F - July 5th

[Reg_Slayer]

@jonm857
1)thanks for the heads up!
2) i think of the reckless construction worker who was no good at science.

@suzieemac
i'm done with math questions for tonight, but will look at it tomorrow.

[Reg_Slayer]

what is the majority rule and what is the minority rule?

EDIT: also the “ULTRAMARES” rule?

[jonm857]

majority rule – client can be liable to anyone in a class of parties whom the CPA knows will rely on the opinion??

minority rule – ultramares? only parties in privity and intended beneficiaries can hold client liable??

B - 81
A - 87
R - 73
F - July 5th

[jonm857]

I swear… this study group would be 10X more efficient in person. We'd all pass. Without a doubt.

B - 81
A - 87
R - 73
F - July 5th

[Reg_Slayer]

awesome so i just read the MINORITY rule IS the Ultramares rule = needs privity or intended 3rd user

vs

majority= forseeable users.

[jonm857]

C-Corp time.

B - 81
A - 87
R - 73
F - July 5th

[Reg_Slayer]

“Privity is not required in an action for fraud”

but when is it required?

[jonm857]

i'm not exactly sure how to answer that off the top of my head, but I do know there's a MCQ out there that nails it.

B - 81
A - 87
R - 73
F - July 5th

[jonm857]

Privity doesn't apply to fraud because if a CPA commits fraud, anybody who suffered a loss can hold the CPA liable.

B - 81
A - 87
R - 73
F - July 5th

[Author]

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