Question 1

There are two kinds of whistle blowing,

Accepted Answer

A) Internal and external 
B) Direct and indirect 
C) Explicit and implicit 
D) Anonymous and public 
A) Internal and external 
B) Direct and indirect 
C) Explicit and implicit 
D) Anonymous and public

Question 2

The Ultramares v.Touche case of 1933 held that a cause of action based on negligence could not be maintained by a third party who was not in contractual privity; however, it did leave open the possibility that:

Accepted Answer

A) Third parties that were "foreseeable" may sue for ordinary negligence 
B) Third parties may sue if one of the parties in contractual privity allowed it to 
C) Third parties may sue in the case of fraud or constructive fraud 
D) Third parties who used the financial statements may sue 
A) Third parties that were "foreseeable" may sue for ordinary negligence 
B) Third parties may sue if one of the parties in contractual privity allowed it to 
C) Third parties may sue in the case of fraud or constructive fraud 
D) Third parties who used the financial statements may sue

Question 3

Auditors deserve blame in failing to uncover fraud in the Equity Funding case due to

Accepted Answer

A) Failing to determine that some journal entries were phony 
B) Failing to recognize that many insurance policy files were forged 
C) Failing to meet some policyholders in person 
D) Failing to secure the audit plan 
A) Failing to determine that some journal entries were phony 
B) Failing to recognize that many insurance policy files were forged 
C) Failing to meet some policyholders in person 
D) Failing to secure the audit plan

Question 4

In the Jacobs v Coopers & Lybrand case, plaintiffs alleged that Coopers:

Accepted Answer

A) Failed to properly audit the company's accounts receivable from two of its suppliers 
B) Turned a blind eye to red flags 
C) Failed to follow the standards of ordinary care 
D) All of the above 
A) Failed to properly audit the company's accounts receivable from two of its suppliers 
B) Turned a blind eye to red flags 
C) Failed to follow the standards of ordinary care 
D) All of the above

Question 5

Martha Stewart was found guilty of which offense with respect to her sale of ImClone stock?

Accepted Answer

A) Insider trading 
B) Obstruction of justice 
C) Fraud 
D) Dressing poorly when she sold the stock 
A) Insider trading 
B) Obstruction of justice 
C) Fraud 
D) Dressing poorly when she sold the stock

Question 6

The Private Securities Litigation Reform Act of 1995 applies the practice of ______.

Accepted Answer

A) Risk assessment 
B) Fraud triangle 
C) Lowballing 
D) Proportionate liability 
A) Risk assessment 
B) Fraud triangle 
C) Lowballing 
D) Proportionate liability

Question 7

In the case of Equity Funding, the audit client

Accepted Answer

A) Fraudulently recorded inventories that did not in fact exist 
B) Inflated its earnings by recording fictitious sales of insurance policies 
C) Moved liabilities off the balance sheet by using thousands of subsidiaries 
D) Recorded inventory below cost, therefore understating costs of goods sold and overstating net income 
A) Fraudulently recorded inventories that did not in fact exist 
B) Inflated its earnings by recording fictitious sales of insurance policies 
C) Moved liabilities off the balance sheet by using thousands of subsidiaries 
D) Recorded inventory below cost, therefore understating costs of goods sold and overstating net income

Question 8

The defendant-auditors in the Anjoorian case argued, in their defense, that:

Accepted Answer

A) To be found guilty to third parties, the court must find that an accountant had contemplated a specific transaction for which the financial statement will be used and that no such transaction was contemplated. 
B) They had no liability to third party shareholders. 
C) The plaintiff's theory of damages is speculative and against public policy. 
D) All of the above. 
A) To be found guilty to third parties, the court must find that an accountant had contemplated a specific transaction for which the financial statement will be used and that no such transaction was contemplated. 
B) They had no liability to third party shareholders. 
C) The plaintiff's theory of damages is speculative and against public policy. 
D) All of the above.

Question 9

The legal term for the intent to deceive, manipulate or defraud is

Accepted Answer

A) Nonfeasance 
B) Misfeasance 
C) Constructive fraud 
D) Scienter 
A) Nonfeasance 
B) Misfeasance 
C) Constructive fraud 
D) Scienter

Question 10

In the U.S., if the auditor can demonstrate having performed services with the same degree of skill and judgment possessed by others in the profession, it can be said to have exercised:

Accepted Answer

A) Prudence 
B) Scienter 
C) Nonfeasance 
D) Due Care 
A) Prudence 
B) Scienter 
C) Nonfeasance 
D) Due Care

Question 11

An important issue in the Hewlett Packard case was:

Accepted Answer

A) Sexting 
B) Pretexting 
C) Twittering 
D) Financial statement fraud 
A) Sexting 
B) Pretexting 
C) Twittering 
D) Financial statement fraud

Question 12

A unique aspect of the lawsuit in Welch v.Cardinal Bankshares Corporation is it:

Accepted Answer

A) Was the first case to deal with the certification of false financial statements by the CEO and CFO thereby violating the Sarbanes-Oxley Act 
B) Was the first case where an individual brought a complaint against an employer under the whistle blowing provisions of the Sarbanes-Oxley Act 
C) Reversed the ruling in Ultramares v.Touche 
D) Reversed the ruling in Bily v.Arthur Young 
A) Was the first case to deal with the certification of false financial statements by the CEO and CFO thereby violating the Sarbanes-Oxley Act 
B) Was the first case where an individual brought a complaint against an employer under the whistle blowing provisions of the Sarbanes-Oxley Act 
C) Reversed the ruling in Ultramares v.Touche 
D) Reversed the ruling in Bily v.Arthur Young

Question 13

All of the following are crimes EXCEPT

Accepted Answer

A) Providing payments to foreign government officials to obtain business. 
B) Bribing foreign political parties to promote enacting more advantageous trade legislation. 
C) Providing monetary assistance to a foreign political candidate with the understanding that if he or she wins, the company will get a bigger contract. 
D) Making payments to a ministerial government employee of a foreign country to obtain a license to do business in that country. 
A) Providing payments to foreign government officials to obtain business. 
B) Bribing foreign political parties to promote enacting more advantageous trade legislation. 
C) Providing monetary assistance to a foreign political candidate with the understanding that if he or she wins, the company will get a bigger contract. 
D) Making payments to a ministerial government employee of a foreign country to obtain a license to do business in that country.

Question 14

In order for an employee to bring an action under Section 806 of the Sarbanes-Oxley Act in a whistle blowing case:

Accepted Answer

A) The employee suffered an unfavorable personnel action 
B) The employee must be engaged in a protected activity or conduct and the circumstances were sufficient to raise the inference that the protected activity was a contributing factor to the unfavorable action 
C) The employer knew actually or constructively that the conduct occurred 
D) All of the above 
A) The employee suffered an unfavorable personnel action 
B) The employee must be engaged in a protected activity or conduct and the circumstances were sufficient to raise the inference that the protected activity was a contributing factor to the unfavorable action 
C) The employer knew actually or constructively that the conduct occurred 
D) All of the above

Question 15

How long do management and the audit committee have to act if the independent auditor reports possible illegal acts to them?

Accepted Answer

A) One week 
B) One month 
C) Three business days 
D) One business day 
A) One week 
B) One month 
C) Three business days 
D) One business day

Question 16

The term "manipulative" connotes

Accepted Answer

A) Gross negligence 
B) Constructive fraud 
C) Nonfeasance which results in investor losses 
D) Intentional or will conduct designed to deceive 
A) Gross negligence 
B) Constructive fraud 
C) Nonfeasance which results in investor losses 
D) Intentional or will conduct designed to deceive

Question 17

Explain the accounting issues involved and ethical lapses in one of the following two cases: (a) Equity Funding or (2) Crazy Eddie.

Accepted Answer

Equity Funding was a case of massive acc

Question 18

The main focus of the Con-Way case is the company's:

Accepted Answer

A) Bribery of Philippine customs officials 
B) Payments to foreign officials at state-owned airlines doing business in the Philippines 
C) Failure to properly record and disclose illicit payments to Philippine customs officials and officials at state-owned airlines doing business in the Philippines 
D) All of the above 
A) Bribery of Philippine customs officials 
B) Payments to foreign officials at state-owned airlines doing business in the Philippines 
C) Failure to properly record and disclose illicit payments to Philippine customs officials and officials at state-owned airlines doing business in the Philippines 
D) All of the above

Question 19

Explain the duty of care of managers and directors.Include in your explanation the role of ethics in making decisions that support such a level of care.

Accepted Answer

The duty of care of managers and directo

Question 20

The Knowledgeware case dealt with which accounting issue?

Accepted Answer

A) Overstated inventory amounts 
B) Sham software sales 
C) Fictitious invoices 
D) Overstated net realizable value of receivables 
A) Overstated inventory amounts 
B) Sham software sales 
C) Fictitious invoices 
D) Overstated net realizable value of receivables

There are two kinds of whistle blowing,

The Ultramares v.Touche case of 1933 held that a cause of action based on negligence could not be maintained by a third party who was not in contractual privity; however, it did leave open the possibility that:

Auditors deserve blame in failing to uncover fraud in the Equity Funding case due to

In the Jacobs v Coopers & Lybrand case, plaintiffs alleged that Coopers:

Martha Stewart was found guilty of which offense with respect to her sale of ImClone stock?

The Private Securities Litigation Reform Act of 1995 applies the practice of ______.

In the case of Equity Funding, the audit client

The defendant-auditors in the Anjoorian case argued, in their defense, that:

The legal term for the intent to deceive, manipulate or defraud is

In the U.S., if the auditor can demonstrate having performed services with the same degree of skill and judgment possessed by others in the profession, it can be said to have exercised:

An important issue in the Hewlett Packard case was:

A unique aspect of the lawsuit in Welch v.Cardinal Bankshares Corporation is it:

All of the following are crimes EXCEPT

In order for an employee to bring an action under Section 806 of the Sarbanes-Oxley Act in a whistle blowing case:

How long do management and the audit committee have to act if the independent auditor reports possible illegal acts to them?

The term "manipulative" connotes

Explain the accounting issues involved and ethical lapses in one of the following two cases: (a) Equity Funding or (2) Crazy Eddie.

The main focus of the Con-Way case is the company's:

Explain the duty of care of managers and directors.Include in your explanation the role of ethics in making decisions that support such a level of care.

The Knowledgeware case dealt with which accounting issue?

Ethical Reasoning Implications for Accounting

Accountants Ethical Decision Process and Professional Judgment

Corporate Governance and Ethical Management

Aicpa Code of Professional Conduct

Audit Responsibilities and Accounting Fraud

Earnings Management and the Quality of Financial Reporting

International Financial Reporting: Ethics and Corporate Governance Considerations

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Exam 6: Legal and Regulatory Obligations in an Ethical Framework

There are two kinds of whistle blowing,

The Ultramares v.Touche case of 1933 held that a cause of action based on negligence could not be maintained by a third party who was not in contractual privity; however, it did leave open the possibility that:

Auditors deserve blame in failing to uncover fraud in the Equity Funding case due to

In the Jacobs v Coopers & Lybrand case, plaintiffs alleged that Coopers:

Martha Stewart was found guilty of which offense with respect to her sale of ImClone stock?

The Private Securities Litigation Reform Act of 1995 applies the practice of ______.

In the case of Equity Funding, the audit client

The defendant-auditors in the Anjoorian case argued, in their defense, that:

The legal term for the intent to deceive, manipulate or defraud is

In the U.S., if the auditor can demonstrate having performed services with the same degree of skill and judgment possessed by others in the profession, it can be said to have exercised:

An important issue in the Hewlett Packard case was:

A unique aspect of the lawsuit in Welch v.Cardinal Bankshares Corporation is it:

All of the following are crimes EXCEPT

In order for an employee to bring an action under Section 806 of the Sarbanes-Oxley Act in a whistle blowing case:

How long do management and the audit committee have to act if the independent auditor reports possible illegal acts to them?

The term "manipulative" connotes

Explain the accounting issues involved and ethical lapses in one of the following two cases: (a) Equity Funding or (2) Crazy Eddie.

The main focus of the Con-Way case is the company's:

Explain the duty of care of managers and directors.Include in your explanation the role of ethics in making decisions that support such a level of care.

The Knowledgeware case dealt with which accounting issue?

Ethical Reasoning Implications for Accounting

Accountants Ethical Decision Process and Professional Judgment

Corporate Governance and Ethical Management

Aicpa Code of Professional Conduct

Audit Responsibilities and Accounting Fraud

Earnings Management and the Quality of Financial Reporting

International Financial Reporting: Ethics and Corporate Governance Considerations

Filters