Select the necessary words from the list of possibilities to complete the following statements. 1 1 Statements Answer 1. Gross negligence is also referred to as 2. IA of financial statements involves the performance of limited investigative procedures that provide a basis for the expression of limited assurance that there are no material departures from generally accepted accounting principles 1136 Tenants' Corporation BarChris 3 When CPAs are associated with a possibility exists that the client may misinterpret the extent of the CPAs' services and believe that the accountants are acting as auditors. common law constructive fraud The statements. case was a landmark case regarding the accountant's liability for unaudited financial 5. The case, a landmark case of liability under the Securities Act of 1933, involved criticism of the auditors' review for subsequent events. Select the necessary words from the list of possibilities to complete the following statements. 2 Statements Answer 1 When CPAs are associated with a possibility exists that the client may misinterpret the extent of the CPAS' services and believe that the accountants are acting as auditors. 2. Under the Securities Act of 1933, initial purchasers of securities may sue the auditors for misleading audited financial statements and need not prove that they relied on the financial statements. The burden of proof is on the auditors to prove that they were in the performance of their work. engagement letter proximate cause registration statement 3. Unwritten law that has developed through court decisions is referred to as review unaudited financial statements 4. When damage to another is directly attributable to a wrongdoer's act, is said to exist. 5. of financial statements involves the performance of limited investigative procedures that provide a basis for the expression of limited assurance that there are no material departures from generally accepted accounting principles