Question 1

John is a CPA in charge of auditing his client,McMillen & Co.John's duty of care to McMillen will most likely be breached if John

Accepted Answer

A) gives his client an oral report instead of a written report. 
B) gives his client incorrect advice based on an honest error in judgment. 
C) fails to give tax advice that would save his client money. 
D) fails to follow generally accepted auditing standards (GAAS). 
A) gives his client an oral report instead of a written report. 
B) gives his client incorrect advice based on an honest error in judgment. 
C) fails to give tax advice that would save his client money. 
D) fails to follow generally accepted auditing standards (GAAS).

Question 2

An accountant is liable for fraud to

Accepted Answer

A) only her client. 
B) only her client and any known user of her information. 
C) any foreseeable user of her work product who justifiably relied on it. 
D) any third party with the exception of investors or creditors. 
A) only her client. 
B) only her client and any known user of her information. 
C) any foreseeable user of her work product who justifiably relied on it. 
D) any third party with the exception of investors or creditors.

Question 3

Penalties on accountants for wrongdoing in the preparation of tax returns are imposed by the

Accepted Answer

A) Internal Revenue Code. 
B) Federal Bureau of Investigation. 
C) Sarbanes-Oxley Act. 
D) GAAP. 
A) Internal Revenue Code. 
B) Federal Bureau of Investigation. 
C) Sarbanes-Oxley Act. 
D) GAAP.

Question 4

Criminal liability for accountants

Accepted Answer

A) is not an option under securities law;there is only civil liability. 
B) is possible under the Securities Act of 1933,the 1934 Act,state securities laws,and the Internal Revenue Code. 
C) may result in fines but not imprisonment from violation of the federal securities laws. 
D) will result from violation of the accountant-client privilege under federal law. 
A) is not an option under securities law;there is only civil liability. 
B) is possible under the Securities Act of 1933,the 1934 Act,state securities laws,and the Internal Revenue Code. 
C) may result in fines but not imprisonment from violation of the federal securities laws. 
D) will result from violation of the accountant-client privilege under federal law.

Question 5

Manuel,in conducting an audit,must rely most heavily on rules found in generally accepted accounting principles (GAAP).

Accepted Answer

A) True 
 B)False

Exam 27: Accountants Liability

John is a CPA in charge of auditing his client,McMillen & Co.John's duty of care to McMillen will most likely be breached if John

An accountant is liable for fraud to

Penalties on accountants for wrongdoing in the preparation of tax returns are imposed by the

Criminal liability for accountants

Manuel,in conducting an audit,must rely most heavily on rules found in generally accepted accounting principles (GAAP).

Introduction to Law

Ethics and Corporate Social Responsibility

International Law

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Constitutional Law

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Introduction to Contracts

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Introduction to Sales

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