Question 1

A tax preparer that fails to give a taxpayer a copy of his or her tax return may be subject to a penalty under the Internal Revenue Code.

Accepted Answer

A) True 
 B)False

Question 2

Doug is an accountant whose clients include Everyday Products,Inc.(EPI).Under the Ultramares rule,if Doug is negligent in his work for EPI,he would be liable to

Accepted Answer

A) EPI and any third party. 
B) EPI and third parties who are foreseen users of his work for EPI. 
C) EPI and third parties who are reasonably foresee-able users of his work for EPI. 
D) EPI only. 
A) EPI and any third party. 
B) EPI and third parties who are foreseen users of his work for EPI. 
C) EPI and third parties who are reasonably foresee-able users of his work for EPI. 
D) EPI only.

Question 3

Under the Restatement (Third) of Torts,accountants can be held li-able for negligence to any third parties.

Accepted Answer

A) True 
 B)False

Question 4

A client's negligence is never a defense to a charge of negligence against an accountant.

Accepted Answer

A) True 
 B)False

Question 5

Tiny is an accountant.Tiny's violation of generally accepted accounting principles and generally accepted auditing standards

Accepted Answer

A) does not indicate that Tiny was negligent. 
B) is prima facie evidence that Tiny was negligent. 
C) precludes Tiny from raising any defense against a negligence claim. 
D) will never subject Tiny to liability. 
A) does not indicate that Tiny was negligent. 
B) is prima facie evidence that Tiny was negligent. 
C) precludes Tiny from raising any defense against a negligence claim. 
D) will never subject Tiny to liability.

Question 6

An accountant can avoid liability by proving that his or her negligence was only the proximate cause of the cli-ent's loss.

Accepted Answer

A) True 
 B)False

Question 7

Bruno is an accountant.Under the Sarbanes-Oxley Act,the degree of government oversight over the public accounting practices of Bruno and other accountants was

Accepted Answer

A) decreased. 
B) increased. 
C) eliminated. 
D) unchanged. 
A) decreased. 
B) increased. 
C) eliminated. 
D) unchanged.

Question 8

Lebron,an attorney,allows a statute of limitations to lapse on a claim by Midwest Metal Fabrication Company,a client.Lebron

Accepted Answer

A) can be held liable for malpractice. 
B) has violated an ethical standard but cannot be held liable. 
C) is subject to criminal penalties under the statute of limitations. 
D) will be automatically disbarred. 
A) can be held liable for malpractice. 
B) has violated an ethical standard but cannot be held liable. 
C) is subject to criminal penalties under the statute of limitations. 
D) will be automatically disbarred.

Question 9

Grover Nut Company files a suit against Hud,its former account-ant,alleging actual fraud.Grover must prove

Accepted Answer

A) intent to deceive. 
B) misrepresentation of a non-material fact. 
C) unjustifiable reliance. 
A) intent to deceive. 
B) misrepresentation of a non-material fact. 
C) unjustifiable reliance.

Question 10

An accountant is not liable for a misstatement to a purchaser of securities who knew of the misstatement but invested anyway.

Accepted Answer

A) True 
 B)False

Question 11

Working papers are the documents through which a court orders an accountant to audit a public company.

Accepted Answer

A) True 
 B)False

Question 12

A qualified opinion must be specific and identify the reason for the qualification.

Accepted Answer

A) True 
 B)False

Exam 30: Liability of Accountants and Other Professionals

A tax preparer that fails to give a taxpayer a copy of his or her tax return may be subject to a penalty under the Internal Revenue Code.

Doug is an accountant whose clients include Everyday Products,Inc.(EPI).Under the Ultramares rule,if Doug is negligent in his work for EPI,he would be liable to

Under the Restatement (Third) of Torts,accountants can be held li-able for negligence to any third parties.

A client's negligence is never a defense to a charge of negligence against an accountant.

Tiny is an accountant.Tiny's violation of generally accepted accounting principles and generally accepted auditing standards

An accountant can avoid liability by proving that his or her negligence was only the proximate cause of the cli-ent's loss.

Bruno is an accountant.Under the Sarbanes-Oxley Act,the degree of government oversight over the public accounting practices of Bruno and other accountants was

Lebron,an attorney,allows a statute of limitations to lapse on a claim by Midwest Metal Fabrication Company,a client.Lebron

Grover Nut Company files a suit against Hud,its former account-ant,alleging actual fraud.Grover must prove

An accountant is not liable for a misstatement to a purchaser of securities who knew of the misstatement but invested anyway.

Working papers are the documents through which a court orders an accountant to audit a public company.

A qualified opinion must be specific and identify the reason for the qualification.

The Legal and Constitutional Environment of Business

Courts and Alternative Dispute Resolution

Ethics and Business Decision Making

Tort Law

Intellectual Property

Internet Law,social Media,and Privacy

Criminal Law and Cyber Crime

Nature and Classification

Agreement in Traditional and E-Contracts

Consideration, capacity, and Legality

Defenses to Contract Enforceability

Third Party Rights and Discharge

Breach and Remedies

The Formation of Sales and Lease Contracts

Performance and Breach of Sales and Lease Contracts

Warranties and Product Liability

Negotiability, transferability, and Liability

Checks and Banking in the Digital Age

Secured Transactions

Creditors Rights and Bankruptcy

Agency Relationships

Employment Law

Sole Proprietorships, partnerships, and Limited Liability Companies

Corporate Formation, financing, and Termination

Corporate Directors, officers, and Shareholders

Investor Protection, insider Trading, and Corporate Governance

Personal Property and Bailments

Real Property and Landlord-Tenant Law

Insurance, wills, and Trusts

International Law in a Global Economy

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