Legal Duties And Resposibilities

Question 0

The accountant client privilege is recognized

Answer 0

Approximately 15 state legislators

Congress for vey limited purposes

Question 1

The state privilege of accountant-client testimonial privilege only applies to state courts not

Answer 1

Federal courts

Question 2

A CPA firm may disclose client name unless disclosure would express

Answer 2

Experiencing financial difficulties

Question 3

Do not disclose client name in

Answer 3

Bankruptcy

Question 4

When a claim is not criminally liable for securities fraud

Answer 4

A claim for RICO cannot b pursued

Question 5

Under 1962 defendants are liable for RICO when it conduct or participate in

Answer 5

Managing the firm

Question 6

The FCPA accounting provisions apply under

Answer 6

sEC registered companies

Question 7

When a person has to pay extra to get someone else to do a job performed by another person they may be compensated for the

Answer 7

Extra costs

Question 8

Liability disclaimers are not upheld in

Answer 8

Court

Question 9

The three viewpoints regarding an accountants liability are

Answer 9

Privity of contract
Reasonably forseeable users
Limited class of actually forseen users

Question 10

The best defense for fraud is to prove

Answer 10

Lack of Scienter

Question 11

Constructive fraud involves

Answer 11

Gross negligence

Question 12

In a negligence case the plaintiff must prove your cpa violated the

Answer 12

GAAS in performing the audit

Question 13

Two ways to establish intent are

Answer 13

Knew about the misrepresentation

Acted recklessly

Question 14

Punitive damages related to intentional or

Answer 14

Reckless

Question 15

A CPA is negligent if he/she fails to correct errors in previously issued

Answer 15

Audit reports

Question 16

Ultramares requires Privity before an accountant is label for

Answer 16

Negligence

Question 17

Sox did not require the rotation of audit firms every seven years just the

Answer 17

Rotation of audit engagement partner and reviewing partner

Question 18

When a RICO claim is predicated of securities fraud no Rico civil suit can be brought until defendant has been

Answer 18

Criminally convicted

Question 19

Mail and wire fraud are RICO

Answer 19

Predicate acts

Question 20

A…FCPA accounting provisions only apply to SEC registered

Answer 20

Corporations

Question 21

An accountant who negligently prepares a clients financial report will b liable to

Answer 21

Third parties where the CPA had prior knowledge of the existence of a limited class of potential users

Question 22

When an accountant knows the financial statements will be used by someone and it contains an error. The plaintiff must prove

Answer 22

Negligence and reliance

Question 23

Privity is not required in a

Answer 23

Fraud case

Question 24

Consequences of breach of contract by accountant the account is entitled to

Answer 24

Fees if minor no fees if major

Question 25

If breach of contract by accountant the client is entitled to

Answer 25

Compensatory damages but not punitive damages

Question 26

Disclaimers in contract does not void accountant from

Answer 26

Liability

Question 27

In a negligence case the following elements must be proven

Answer 27

Duty Breach Damages Proximate cause

Question 28

Contributory negligence results is used in all jurisdictions where the

Answer 28

clients carelessness interferes with the accountants performance

Question 29

Clients carelessness that helps create the situation the auditor failed to detect is accepted by

Answer 29

Most jurisdictions

Question 30

Elements of fraud

Answer 30

False representation of fact The misrepresented (or omitted) fact was material The accountant knew or recklessly disregarded the falsity The accountant intended to and induce plaintiff reasonable reliance on the misstatement or omission. The client suffered damages

Question 31

Fraud is

Answer 31

An intentional tort Runs to all foreseeable victims of the fraud May be liable for punitive and compensatory damages

Question 32

Restatement view is the

Answer 32

Majority view

Question 33

Ultramares accountant is only liable to those who there is

Answer 33

Privity of contract

Question 34

Accounting provisions apply to all companies registered with

Answer 34

The SEC

Question 35

Internal accounting records must provide reasonable assurance that

Answer 35

Transactions are executed in accordance with the mgt general or specific authorization Transactions recorded as necessary to permit preparation of proper financial info Maintain accountability for assets Access to assets is authorized Recorded assets are compared with existing assets at reasonable intervals

Question 36

Criminal penalties of bribery are

Answer 36

Individual maximum of $100,000 or 5 years jail Corp max $1M No criminal prosecutions for inadvertent or insignificant errors Civil maximum civil fine of $10,000

Question 37

Criminal Rico charges can be brought by the

Answer 37

DOJ dept of justice

Question 38

Civil charges can be bought by

Answer 38

Individuals who sue for treble damages and attorney fees

Question 39

Rico prohibits

Answer 39

Receiving money or property through a pattern of racketeering and investing into an enterprise Acquiring and controlling an enterprise through racketeering Conducting or participating in enterprise affairs Conspiring to violate the 3 points above

Question 40

The elements of racketeering under 1962(c) are

Answer 40

Defendant conducted or participated in the conduct Of an enterprise Through a pattern Of racketeering

Question 41

Racketeering activity is

Answer 41

Mail fraud Wire fraud And other predicate acts

Question 42

When probing Rico for securities the plaintiff must prove the defendant had

Answer 42

already been convicted of securities fraud

Question 43

Punishments under SOX for destruction of records are

Answer 43

10 yrs jail and fine for failure to retain records Fine or imprisoned for up to 20 years for destruction of records and corrupt tampering with docs to b used in an official proceeding

Question 44

Types of testimonial privileges

Answer 44

Attorney client, doctor patient, priest penitent.

Question 45

Work product privileged

Answer 45

Prevents one party from learning the other side strategies for litigation

Question 46

15 states allow an accountant client privilege

Answer 46

The privilege belongs to the client Can be waived by client Waiver of part is waiver to all Only applies to state court

Question 47

The lawyers umbrella can

Answer 47

Can shelter communications with an accountant when used for preparing litigation.

Question 48

Tax practitioners privilege

Answer 48

Exceptions criminal matters Matters to IRS Tax advice on state or local matters Written advice on promotion of tax shelter

Question 49

The tax privilege does not protect

Answer 49

Information for facilitating tax return preparation | General accounting advice

Question 50

Section 6713 imposes a civil penalty for

Answer 50

Each unauthorized disclosure

Question 51

Section 7216 imposes a criminal fine

Answer 51

And potential imprisonment who knowingly disclose info and use info for other purposes other than to prepare a return