Exam 40: Liability of Accountants and Other Professionals

Generally,an attorney is not liable to a non client unless the attorney has committed fraud or malicious conduct.

Under the Sarbanes-Oxley Act,accountants need not retain working papers relating to an audit or review.

Nguyen Imports,Inc.,accuses Ogilvie,an accountant,of committing defalcation. This is

Professionals are required to adhere to certain standards of performance within their profession.

In an opinion,an auditor can include a general statement disclaiming any liability for false or misleading financial statements.

A failure to follow generally accepted accounting principles and generally accepted auditing standards is proof of a lack of due diligence.

An accountant normally will not be held liable to the client for incorrect judgment.

Under rules of professional conduct,committing a criminal act that reflects adversely on a person's "honesty" is professional misconduct.

An accountant may be liable for a misstatement or omission of material fact in a registration statement.

In all states,communications between an accountant and his or her client are privileged.

Miriam is an accountant. Natalie is an attorney. Which professional is most restricted from disclosing her or his client's communication?

Digital Systems Corporation files a suit against Ethan,its former accountant,alleging constructive fraud. Digital Systems need not prove