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Question
A. Only the owner's actual damages
B. Only the attributable profits by the infringer
C. Owner's actual damages and the attributable profits of the infringer
D. Punitive damages
Answer
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C. $20,000 fine and five years' imprisonment.
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Nast Corp. orally engaged Baker & Co., CPAs, to audit its financial statements. The management of Nast informed Baker that it suspected the accounts receivable were materially overstated. Although the financial statements audited by Baker did, in fact, include a materially overstated accounts receivable balance, Baker issued an unqualified opinion. Nast relied on the financial statements in deciding to obtain a loan from Century Bank to expand its operations. Nast has defaulted on the loan and has incurred a substantial loss. If Nast sues Baker for negligence in failing to discover the overstatement, Baker's best defense would be that:
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C. A securities broker who provides investment advice to retail investors.
D. An attorney who advises companies on corporation and business laws.