Bran, CPA, audited Frank Corporation. The shareholders sued both Frank and Bran for securities fraud under the Federal Securities Exchange Act of 1934. The court determined that there was securities fraud and that Frank was 80% at fault and Bran was 20% at fault due to her negligence in the audit. Both Frank and Bran are solvent and the damages were determined to be $1 million. What is the maximum liability of Bran?

Question

Quizplus · Accepted Answer

As per the court's ruling, Bran was found to be 20% at fault. Therefore, her maximum liability would be 20% of the damages, which is $200,000 ($1 million x 20%). Option A is incorrect because Bran was found to be partially at fault. Option C is incorrect because the damages were only $1 million, and the court determined the maximum liability of Bran to be only 20% of that amount. Option D is incorrect because it includes the full damages, not Bran's share of the liability.

Bran, CPA, Audited Frank Corporation