5-16 (Objectives 5-30,5-50,5-6) The following questions concern CPA firms' liability under common law or statutory law. Choose the best response. a. Which of the following elements is required to be proven by the plaintiff to hold an accountant liable for gross negligence but not for actual fraud? 1. Misrepresentation of a material fact 2. Intention to deceive 3. Intention to induce client's reliance on the misrepresentation 4. Reckless action b. One of the elements that a plaintiff must prove to hold a CPA who signs off on financial statements in a registration statement liable for misstatements in the financial statements under Section 11 of the 1933 Act is that the 1. plaintiff relied on the misrepresentation. 2. CPA intended to deceive. 3. plaintiff suffered a loss. 4. CPA was negligent. c. Under the Ultramares rule, an accountant that negligently prepares a client's financial report will be liable to 1. clients and any person or limited foreseeable class of persons who the CPA knows will be relying on the CPA's work. 2. persons in privity of contract with the CPA and intended third parties. 3. clients and any third party that foreseeably relied on the accountant's report. 4. the client only