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5 Written Questions

5 Matching Questions

  1. Laws for Auditor Liability
  2. PCAOB
  3. CPA Liability
  4. Breach of Contract
  5. Causes of Legal Action
  1. a May conduct investigations and disciplinary proceedings on registered CPA firm and professional employee. Include monetary damages, suspension of firms from engagements with public companies, regerral of criminal cases to Justice Department
  2. b May exceed that of other professions because:
    number of parties suffering significant losses,
    possibly millions of investors as well as firms creditors,
    amounts can be excessive in some cases exceeding the limits of professional liability insurance
  3. c Breach of Contract, Negligence
  4. d Common Law, Statutory Law
  5. e when a person fails to perform a contractual duty

5 Multiple Choice Questions

  1. Auditors know audited financial statements were to be used for a particular purpose by a known third party user
  2. Unaudited statements; importance of engagement letters to establish nature of services provided, need to follow up on unusual findings even when not performing Audit.
  3. failure to use minimal care or operating with a "reckless diregard for the truth" or "reckless behavior"
  4. requires audited financial statements in registration statements of initial public offerings
  5. failure to exercise reasonable care, thereby causeing harm to another or to property

5 True/False Questions

  1. FraudMay conduct investigations and disciplinary proceedings on registered CPA firm and professional employee. Include monetary damages, suspension of firms from engagements with public companies, regerral of criminal cases to Justice Department

          

  2. Continental Vending (Ciminal Liability)Auditors were held criminally liable for gross negligence. Largely responsible for the development of required disclosure of related party transactions

          

  3. Indirect Illegal ActHave material effect on financial statements

          

  4. Deep Pocket TheorySue those who can pay. Want the firm to settle to make a quick buck even if firm did nothing wrong.

          

  5. Direct Illegal ActViolations of laws other than those related to reporting: OSHA, FDA, EEOC Laws

          

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