accountants legel liability

Question 1

Contract law

Answer 1

the contract between an accountant and the client is subject to the general principles of contract law.

Question 2

Tort law-

Answer 2

negligence. An accountant is liable for failing to exercise the degree of care a reasonably competent accountant would exercise under the circumstances.

Question 3

Criminal law

Answer 3

fraud

Question 4

Working papers

Answer 4

auditors records of the procedures they followed the test performed info obtained and conclusions reached in a connection with an audit.

Question 5

Accountant-client privilege

Answer 5

There is not Such a privilege is not recognized by the common law or federal law.

Question 6

SOX

Answer 6

Sarbanes-Oxley Act

Question 7

Sarbanes-Oxley Act establishes

Answer 7

a new regulatory body to oversee public company auditors.

Question 8

Sarbanes-Oxley Act makes

Answer 8

auditors more independent from their clients.

Question 9

4. What does SOX prohibit accounting firms from as to their audit clients? -

Answer 9

prohibits accounting firms from performing 8 specified non-audit services for audit clients:
1) fairness opinions 2) management functions/ human resources 3) actuarial services

Question 10

Sarbanes-Oxley Act places

Answer 10

direct responsibility for the audit relationship on audit committees