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Yaeger REG > Quiz 23-26 > Flashcards

Quiz 23-26 Flashcards

1
Q

Management will include an internal control report in its public audit report, your CPA firm reviews the management report to see if…

2) and the CPA firm…

A

it is in accordance with Attestation standards

2) reports on management’s report without charging additional
Fee

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2
Q

Management will include an internal control report in its public audit report. According to Section 404 of SOX, the CPA firm shall…

A

Attest to and report on assessment made by management

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3
Q

Can a CPA list his name and designation in the listings and bank stationary?

A

Yes

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4
Q

Work product doctrine is also know as…

A

Work product rule

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5
Q

Work product doctrine, what does it do? 2

A

1 Protects certain work to be admitted into a tax case

2 material in question may be shielded

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6
Q

A CPA who fraudulently performs an audit of a corporation’s financial statements will probably be liable to…

A

Any person who suffered a loss as result of the fraud

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7
Q

Under Ultramares, third parties who aren’t in privity of contract with accountants cannot…

2) But can…

A

Cannot sue for negligence

2) Can sue for gross negligence

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8
Q

Interpretation 101-5 of Rule 101 regarding independence states in essence that a loan to a limited partnership in which members have combined interest exceeding…

A

50% of total limited partnership interest is considered a loan
To those members

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9
Q

Section 206 does not allow a CPA firm employee to be a significantly placed employee (controller) of publicly traded firm for…

A

At least 1 year

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10
Q

If you’re offered a high level job by a publicly traded company and your CPA firm has not audited for 1 year…

A

You can take the job

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11
Q

Reason for 1 year cooling period between auditing at public accounting firm and taking a high level job at a public audit client?

A

Too high a potential conflict of interest

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12
Q

Because taxpayers are not versed in the language of tax, communication to clients should…

A

Should not contain too much detail

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13
Q

NASBA is tasked with…

A

Monitoring CPE programs for accuracy and content

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14
Q

State boards dictate the…

A

Rules and expectations of licensure within individual jurisdictions

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15
Q

A CPA’s Membership in a client social club, such as a country club is…

A

Basically only for social purposes and does not impair independence

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16
Q

What would impair a CPA’s independence if they were members of a client’s country club?

A

If they served on the club’s board of directors

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17
Q

The CPA owns an office building and the mortgage on the building is guaranteed by a client. This would…

A

Impair CPAs independence

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18
Q

If an audit failed to reveal employee fraud, the CPA’s adherence to…

A

GAAS may prevent liability

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19
Q

When a contract is assigned if the party fails to perform, the assignor would…

A

Be liable for performance

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20
Q

If the assignor enters into a contract with a 3rd party and assigns the rights of the contract to the other party (assignee). What are 3 circumstances that would make the assignor liable to the assignee?

A

1 assignor fails to perform contract

2 assignor releases 3rd party from contract

3 3rd party pays assignor

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21
Q

If the assignor enters into a contract with a 3rd party and assigns the rights of the contract to the other party (assignee). In what circumstance would the assignor no be liable to the assignee?

A

The assignee releases the third party

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22
Q

A single member entity is…

A

Disregarded as separate from their owner

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23
Q

An LLC with one member must submit IRS Form 8832 and elect to be…

A

A corporation or disregarded entity for tax purposes

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24
Q

Under the Securities Act of 1933, original offerings may be made…

A

Without registration

25
Q

Under the 1933 act any Resales of offering may be subject…

A

Registration unless another exemption provision of the Act is Applicable

26
Q

Under the ‘33 Act, For securities sold under a transaction exemption, Resales of the offering must be made under…2

A

1 a registration or

2 different exemption provision of the 1933 Act

27
Q

Under the statute of limitations, in a case of a claim for breach of contract, the time period begins to run on the date…

2) this would also apply to the type of contract that is…

A

Date the contract is breached

2 construction contract

28
Q

The 1933 act is only applicable to issuance of securities by…3

A

1 issuers

2 underwriters

3 dealers

29
Q

If the sale or offer to sell securities is made by a person other than an issuer, underwriter or dealer the offering of securities will…

A

Be exempt from registration under the ‘33 Act

30
Q

Control person

A

Someone having substantial power to influence the policies of management (ex. President of company)

31
Q

The CPA may not associate his name with…

A

Direct mailers to non clients

32
Q

Example of direct mailers to non clients

A

Estate planning firm composed of nonCPA owners who use high

Level of direct advertising

33
Q

The CPA had ethical responsibilities to the public no matter in what…

A

Form or organization CPA participates

34
Q

Apparent authority (AKA ostensible authority) is…

A

1 Power or understanding created or manifested in mind of third
party

2 that agent may act on behalf of principal

35
Q

Any limitation on apparent authority (in partnership) must be…

A

Communicated to third parties to be effective

36
Q

Apparent authority is derived from the words and actions of the principal as…

2) It is not…

A

Viewed by the third party

2) not from express authority

37
Q

Submitting a claim against the partnerships to arbitration requires…

A

Express authority from the principals

38
Q

The Act of 1933 imposes various criminal and civil liability on…

A

The issuer if the omissions are material

39
Q

Under the ‘33 Act, when omissions are intentional, this leaves…

A

Little defense for the defendant

40
Q

Under the Act of 1934, SEC Rule 10b-5 specifically addresses…2

A

1 Fraud in issuance of securities and

2 and there associated materials whether registered under ‘33 Act
or not

41
Q

The key is, to be recognized under the 33 and 34 acts, the omission must be…

A

Material misrepresentation to the buyer

42
Q

Specific performance forces performance of the contract when…

A

The goods are unique

43
Q

Patents are unique, so the court would grant…

A

Remedy for contract for sale of patent

44
Q

Upon dissolution of a partnership, each partner…

A

Continues to have apparent authority to make contracts

45
Q

Upon dissolution of a partnership, each partner continues to have apparent authority to make contracts which would be binding upon the partnership until and unless both…

A

Both actual and constructive notice of dissolution is given by the partnership

46
Q

For a purchaser of land to avoid a contract with the seller based on duress, it must be shown that…

A

The seller’s improper threats actually induced the purchaser to
assent the contract

47
Q

Assent

A

Caused

48
Q

Under Regulation A, an issuer is permitted to offer up to…2

A

1 $5 million of securities

2 including a maximum of $1.5 million

49
Q

Under Regulation A, an issuer is permitted to offer up to $5 million of securities including a maximum of $1.5 million by…

A

Selling security holders in any 12 month period without registration
With SEC

50
Q

All offerings made under Registration A are…

A

Exempt from full registration under the ‘33 Act

51
Q

Registration A filing is…

A

Less detailed than a formal registration

52
Q

Under registration A, Not all intrastate offerings are…

A

Exempt from registration requirements

53
Q

Example of numerous limitations on intrastate exception

A

At least 80% of issuer’s assets must be located within state of
Issuance

54
Q

Stockbroker transactions and issuances under Reg D which involve resale are…

A

Not exempt from registration

55
Q

Partnership’s interest in specific partnership property is…

A

Not assignable to the partnership’s individual creditors

56
Q

A partnership’s interest in specific partnership property is not…

A

Not subject to attachment by partner’s individual creditors

57
Q

A creditor may not obtain a…

A

Partner’s interest in specific partnership property

58
Q

A court will not award a partner’s creditor with a…

A

Lien on specific partnership property

Yaeger REG (77 decks)

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