Chapter 44

Question 1

Accountants can have grounds for legal liability in tort law because

Answer 1

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

Question 2

Accountants can have grounds for legal liability in criminal law because

Answer 2

Of fraud

Question 3

Working papers

Answer 3

The accountant is the owner of them but may not disclose their contents unless the client agrees of a court orders it

Question 4

Accountant client privilege

Answer 4

There is none.

Some states have adopted statutes granting some form if privilege.

Question 5

What does Sarbanes Oxley Act says what about auditors

Answer 5

It makes them more independent from their clients and the audit communities are responsible for the relationship

Question 6

Auditors are prohibited from

Answer 6

8 specified things.

Like bookkeeping, financial informations system design and implementation, and appraisal or valuation services, fairness opinions, management functions or human resources, actuary services

Question 7

Accountants can have grounds for legal liability in contract law because

Answer 7

The contract between an accountant and a client is subject to common law