Question 1

This act increased protection available to whistleblowers.

Accepted Answer

A)  Sarbanes-Oxley Act of 2002. 
B)  Securities Act of 1933. 
C)  Securities Act of 1934. 
D)  Securities Litigation Uniform Standards Act of 1998. 
A)  Sarbanes-Oxley Act of 2002. 
B)  Securities Act of 1933. 
C)  Securities Act of 1934. 
D)  Securities Litigation Uniform Standards Act of 1998.

Question 2

Which of the following is the best statement of the general standard of performance owed by an accountant in his or her professional work?

Accepted Answer

A)  To do the job correctly and discover all irregularities. 
B)  To follow generally accepted accounting principles (GAAP) and generally accepted auditing standards (GAAS). 
C)  To act as a professional and not commit fraud. 
D)  To exercise the skill and care of the ordinarily prudent accountant in the same circumstances. 
A)  To do the job correctly and discover all irregularities. 
B)  To follow generally accepted accounting principles (GAAP) and generally accepted auditing standards (GAAS). 
C)  To act as a professional and not commit fraud. 
D)  To exercise the skill and care of the ordinarily prudent accountant in the same circumstances.

Question 3

The Foreign Corrupt Practices Act requires that

Accepted Answer

A)  Auditors engaged to examine the financial statements of public companies report all illegal payments to the SEC. 
B)  Public companies establish independent audit committees to monitor the effectiveness of their system of internal control. 
C)  U.S. firms doing business abroad report sizable payments to non-U.S. citizens to the Justice Department. 
D)  Public companies devise and maintain an adequate system of internal control. 
A)  Auditors engaged to examine the financial statements of public companies report all illegal payments to the SEC. 
B)  Public companies establish independent audit committees to monitor the effectiveness of their system of internal control. 
C)  U.S. firms doing business abroad report sizable payments to non-U.S. citizens to the Justice Department. 
D)  Public companies devise and maintain an adequate system of internal control.

Question 4

Which statement is correct concerning an auditor's statutory legal liability?

Accepted Answer

A)  The Securities Act of 1933 broadened the auditor's common law liability and the Securities Exchange Act of 1934 narrowed it. 
B)  The auditor has a greater burden of defense under the Securities Act of 1933 than under the Securities Exchange Act of 1934. 
C)  Criminal liability only arises under state law. 
D)  Statutory liability usually modifies the auditor's liability to the client. 
A)  The Securities Act of 1933 broadened the auditor's common law liability and the Securities Exchange Act of 1934 narrowed it. 
B)  The auditor has a greater burden of defense under the Securities Act of 1933 than under the Securities Exchange Act of 1934. 
C)  Criminal liability only arises under state law. 
D)  Statutory liability usually modifies the auditor's liability to the client.

Question 5

In general,the third-party (primary)beneficiary rule as applied to a CPA's legal liability in conducting an audit is relevant to which of the following causes of action against a CPA?

Accepted Answer

A)  Fraud and constructive fraud, but not negligence. 
B)  Fraud, but not constructive fraud or negligence. 
C)  Constructive fraud and negligence, but not fraud. 
D)  Negligence, but not fraud or constructive fraud. 
A)  Fraud and constructive fraud, but not negligence. 
B)  Fraud, but not constructive fraud or negligence. 
C)  Constructive fraud and negligence, but not fraud. 
D)  Negligence, but not fraud or constructive fraud.

Question 6

Under the liability provisions of Section 11 of the Securities Act of 1933,a CPA may be liable to any purchaser of a security for certifying materially misstated financial statements that are included in the security's registration statement.Under Section 11,which of the following must be proven by a purchaser of the security?

Accepted Answer

A)  The CPA committed fraud and the purchaser relied on the financial statements. 
B)  The purchaser relied on the financial statements, but not that the CPA committed fraud. 
C)  The CPA committed fraud, but not that the purchaser relied on the financial statements. 
D)  Neither that the CPA committed fraud, nor that the purchaser relied on the financial statements. 
A)  The CPA committed fraud and the purchaser relied on the financial statements. 
B)  The purchaser relied on the financial statements, but not that the CPA committed fraud. 
C)  The CPA committed fraud, but not that the purchaser relied on the financial statements. 
D)  Neither that the CPA committed fraud, nor that the purchaser relied on the financial statements.

Question 7

Under the Rusch Factors doctrine,to which of the following parties will an accountant be liable for negligence?

Accepted Answer

A)  Only parties in privity and not those reasonably foreseeable third parties. 
B)  Both parties in privity and reasonably foreseeable third parties. 
C)  Only reasonably foreseeable third parties and not those parties in privity. 
D)  Neither reasonably foreseeable third parties nor parties in privity. 
A)  Only parties in privity and not those reasonably foreseeable third parties. 
B)  Both parties in privity and reasonably foreseeable third parties. 
C)  Only reasonably foreseeable third parties and not those parties in privity. 
D)  Neither reasonably foreseeable third parties nor parties in privity.

Question 8

Under Section 11 of the Securities Act of 1933,which of the following standards may a CPA use as a defense?

Accepted Answer

A)  Generally accepted auditing standards and generally accepted fraud detection standards. 
B)  Generally accepted auditing standards but not generally accepted fraud detection standards. 
C)  Generally accepted fraud detection standards but not generally accepted auditing standards. 
D)  Neither generally accepted auditing standards nor generally accepted fraud detection standards. 
A)  Generally accepted auditing standards and generally accepted fraud detection standards. 
B)  Generally accepted auditing standards but not generally accepted fraud detection standards. 
C)  Generally accepted fraud detection standards but not generally accepted auditing standards. 
D)  Neither generally accepted auditing standards nor generally accepted fraud detection standards.

This act increased protection available to whistleblowers.

Which of the following is the best statement of the general standard of performance owed by an accountant in his or her professional work?

The Foreign Corrupt Practices Act requires that

Which statement is correct concerning an auditor's statutory legal liability?

In general,the third-party (primary)beneficiary rule as applied to a CPA's legal liability in conducting an audit is relevant to which of the following causes of action against a CPA?

Under the Rusch Factors doctrine,to which of the following parties will an accountant be liable for negligence?

Under Section 11 of the Securities Act of 1933,which of the following standards may a CPA use as a defense?

An Introduction to Assurance and Financial Statement Auditing

The Financial Statement Auditing Environment

Audit Planning,Types of Audit Tests,and Materiality

Risk Assessment

Evidence and Documentation

Internal Control in a Financial Statement Audit

Auditing Internal Control Over Financial Reporting

Audit Sampling: An Overview and Application to Tests of Controls

Audit Sampling: An Application to Substantive Tests of Account Balances

Auditing the Revenue Process

Auditing the Purchasing Process

Auditing the Human Resource Management Process

Assurance,Attestation,and Internal Auditing Services

Auditing the Financinginvesting Process: Prepaid Expenses, Intangible Assets, and Property, Plant, and Equipment

Auditing the Financinginvesting Process: Long-Term Liabilities, Stockholders Equity, and Income Statement Accounts

Auditing the Financinginvesting Process: Cash and Investments

Completing the Audit Engagement

Reports on Audited Financial Statements

Professional Conduct,Independence,and Quality Control

Assurance,Attestation,and Internal Auditing Services

Filters

Exam 20: Legal Liability

This act increased protection available to whistleblowers.

Which of the following is the best statement of the general standard of performance owed by an accountant in his or her professional work?

The Foreign Corrupt Practices Act requires that

Which statement is correct concerning an auditor's statutory legal liability?

In general,the third-party (primary)beneficiary rule as applied to a CPA's legal liability in conducting an audit is relevant to which of the following causes of action against a CPA?

Under the Rusch Factors doctrine,to which of the following parties will an accountant be liable for negligence?

Under Section 11 of the Securities Act of 1933,which of the following standards may a CPA use as a defense?

An Introduction to Assurance and Financial Statement Auditing

The Financial Statement Auditing Environment

Audit Planning,Types of Audit Tests,and Materiality

Risk Assessment

Evidence and Documentation

Internal Control in a Financial Statement Audit

Auditing Internal Control Over Financial Reporting

Audit Sampling: An Overview and Application to Tests of Controls

Audit Sampling: An Application to Substantive Tests of Account Balances

Auditing the Revenue Process

Auditing the Purchasing Process

Auditing the Human Resource Management Process

Assurance,Attestation,and Internal Auditing Services

Auditing the Financinginvesting Process: Prepaid Expenses, Intangible Assets, and Property, Plant, and Equipment

Auditing the Financinginvesting Process: Long-Term Liabilities, Stockholders Equity, and Income Statement Accounts

Auditing the Financinginvesting Process: Cash and Investments

Completing the Audit Engagement

Reports on Audited Financial Statements

Professional Conduct,Independence,and Quality Control

Assurance,Attestation,and Internal Auditing Services

Filters