Question 1

An accountant has no liability to parties other than the client.

Accepted Answer

A) True 
 B)False

Question 2

The failure by an accountant to use the care of a reasonably competent accountant is:

Accepted Answer

A) negligence. 
B) material breach. 
C) substantial performance. 
D) fraud. 
A) negligence. 
B) material breach. 
C) substantial performance. 
D) fraud.

Question 3

The Private Securities Litigation Reform Act of 1995 provides that an auditor can be held liable in a private action for any finding, conclusion, or statement expressed in the report the Act requires the auditor to make to the SEC.

Accepted Answer

A) True 
 B)False

Question 4

The group responsible for registering public accounting firms that prepare audit reports for issuers; overseeing the audit of public companies; establishing audit report standards and rules; and inspecting, investigating, and enforcing compliance on the part of registered public accounting firms is the:

Accepted Answer

A) FTC. 
B) Public Company Accounting Oversight Board. 
C) SEC. 
D) American Institute of Certified Public Accountants. 
A) FTC. 
B) Public Company Accounting Oversight Board. 
C) SEC. 
D) American Institute of Certified Public Accountants.

Question 5

Section 11 of the 1933 Securities Act imposes liability upon an accountant for negligence in the conduct of an audit.

Accepted Answer

A) True 
 B)False

Question 6

An accountant is subject to potential civil liability arising from the professional services he provides to his clients and third parties.

Accepted Answer

A) True 
 B)False

Question 7

A group of investors brings a class action lawsuit against the Z & R Accounting Firm under SEC Rule 10b-5.Angela, an accountant with the firm, had done an audit of the Pennymart Inc.books.The audit failed to disclose that Orrin, the president of Pennymart, had stolen large amounts of cash from the firm.Pennymart eventually filed for bankruptcy as a result of the thefts.What is the likely result of the suit?

Accepted Answer

In general, accountants may be held civi

Exam 44: Accountants Legal Liability

An accountant has no liability to parties other than the client.

The failure by an accountant to use the care of a reasonably competent accountant is:

The Private Securities Litigation Reform Act of 1995 provides that an auditor can be held liable in a private action for any finding, conclusion, or statement expressed in the report the Act requires the auditor to make to the SEC.

Section 11 of the 1933 Securities Act imposes liability upon an accountant for negligence in the conduct of an audit.

An accountant is subject to potential civil liability arising from the professional services he provides to his clients and third parties.

Introduction to Law

Business Ethics

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remedies

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability: Warranties and Strict Liability

Sales Remedies

Form and Content

Transfer

Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Relationship of Principal and Agent

Relationship With Third Parties

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporations

Secured Transactions and Suretyship

Bankruptcy

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Consumer Protection

Environmental Law

International Business Law

Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Wills

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