Quiz Wrong Answers Flashcards
The best defense against a suit under section 11 1933 is…
Due care
Your firm has the task of auditing a large oil and gas company. You attend the meeting with the audit partner. What is the proper result of the meeting?2
1 audit partner discusses matters of significance with management
And
2 provides recommended solutions and ramifications of alternative disclosure and accounting treatment
Due care
Reasonable grounds to believe it’s client’s financial statements
Were accurate
Proof that the purchaser relied on financial statements is…
Not required to create liability under section 11 1933
Rather than being based on negligence, liability under Section 11 is based on…
Misstatement or omission
The audit firm has public SOX client for seven years. Has the firm audited the client for too many years?
No, as long as lead audit partner and review partner are rotated
Every 5 years
A single member LLC is eligible to file an election to be taxed as…2
1 a corporation or
2 a disregarded entity
I roll a partner in JKO Partnership, assigns its interest in the partnership to Trell, who is not made partner. Trell is the…
Assignee
An assignee has the right to…
Receive the assignor’s profits from the partnership
The assignee does not have the right to asset personal rights belonging to the original partner without…
Being formally admitted to the partnership
Personal rights belonging to an original partner include…3
1 right to vote
2 participate in management decisions
3 right to inspect books and records
If an audit firm audits a company with a going concern issue discovered on the audit and a supplier. The auditor cannot notify the supplier because…
Info is confidential and can’t be reported to supplier without client’s consent
On dissolution of a general partnership, distributions will be made to satisfy partner’s claims in which order?
1 partners’ capital accounts
2 amounts owed partners with respect to profits
3 amounts owed partners for loans to the partnership
Amounts owed partners for loans to partnership
Partners’ capital accounts
Amounts owed partners with respect to profits
The purpose of the Securities Act of 1933 is to…
Protect the unsophisticated investing public by requiring registration
Of securities prior to issuance
Registration involves…
Full disclosure of financial info
