Exam 27: Accountants' Duties and Liability

Registered accounting firms that audit more than 100 public companies annually are subject to inspection and review by the Public Company Accounting Oversight Board (PCAOB)once a year.

A person who practices as an accountant but is not certified is referred to as a public accountant.

A qualified opinion is the most favorable opinion that an accountant can render.

In which of the following ways can an accountant avoid liability under Section 18(a)of the Securities Exchange Act of 1934?

The SEC has oversight and enforcement authority over the Public Company Accounting Oversight Board (PCAOB).

Which of the following opinions would an auditor make for a company that has materially misstated certain items on its financial statements?

A formal entrance into a contract between a client and an accountant is known as an ________.

When does an auditor submit a disclaimer of opinion? What is the significance of an auditor's opinion?

Accountants can be found liable for violating Section 18(a)of the Securities Exchange Act of 1934 since ________.

What is the accountant-client privilege?

The Sarbanes-Oxley Act of 2002 makes it lawful for a registered public accounting firm to simultaneously provide audit and nonaudit investment banking services to a public company.

Accountants cannot be held criminally liable for material irregularities in financial statements prepared for registration statements.

Which of the following legislation provides for both criminal and civil penalties (including treble damages)for securities fraud by accountants and other professionals?

The Securities Act of 1933 requires that before a corporation or another business sells securities to the public,the issuer must file a registration statement with the Securities and Exchange Commission (SEC).

The U.S.Supreme Court has held that there is an accountant-client privilege under federal law.

A due diligence defense cannot be asserted by an accountant against the civil liabilities of Section 11(a)of the Securities Act of 1933.

Which of the following opinions is necessary for a company to avoid unfavorable consequences (for example,not being able to sell its securities to the public)?

Which of the following legislation makes it a criminal offense to willfully make any untrue statement of material fact in a registration statement filed with the SEC?

When an accountant has behaved negligently causing damage to a third party,the third party ________.

Persons injured by a RICO violation can bring a private civil action against the violator and recover treble damages.