Question

If a broker does not correct an accounting error, what are the consequences?

1) He could be disciplined by the commission
2) He could be civilly liable
3) He could be criminally liable
4) All of the above

Answer 1

If a broker does not correct an accounting error, the consequences can include disciplinary action by the commission, civil liability, and potential criminal charges.

Step-by-step explanation:

If a broker does not correct an accounting error, there can be several consequences. Firstly, the broker could be disciplined by the commission overseeing their activities. The commission may impose penalties, such as fines or a suspension of their license, as a means of enforcing proper accounting practices. Secondly, the broker could be held civilly liable for any financial harm resulting from the accounting error. This means that they may be sued by clients or investors who have suffered losses or damages as a result of the error. The broker may be required to compensate them for their losses. Lastly, the broker could face criminal liability if the accounting error is found to be intentional or fraudulent. In such cases, the broker may be prosecuted and, if convicted, could face fines or even imprisonment.