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5 Written questions

5 Matching questions

  1. Securities Act of 1933
  2. Restatement of torts approach
  3. Breach of Contract
  4. Causes of Legal Action
  5. Contingent-fee cases
  1. a if lose case client owes lawyer nothing, if win lawer get a % of winnings.
  2. b Breach of Contract, Negligence
  3. c requires audited financial statements in registration statements of initial public offerings
  4. d when a person fails to perform a contractual duty
  5. e Auditors know audited financial statements were to be used for a particular purpose, but auditors did not necessarily know the specific user

5 Multiple choice questions

  1. Sue those who can pay. Want the firm to settle to make a quick buck even if firm did nothing wrong.
  2. Indirect: can have future impact,
    Auditor must follow up to determine if material
    If material - Report (to audit committee), make sure adequately disclosed in financial statements
    If not material, inform appropriate level of management
  3. Common Law, Statutory Law
  4. Established the SEC and established requirement for annual audited financial statements
  5. If Public company, auditor must inform Board of Directors for illegal acts by client.
    BOD has one day to inform SEC
    If don't; auditor has one day to inform SEC, or resign from audit and inform SEC,
    SEC may impose fines on auditor if not informed of illegal act

5 True/False questions

  1. US vs Arthur Andersendesigned to prevent multiple suits that might result in inconsistent judgements. Lawyers try to identify every potential member of the class.

          

  2. Litigation PerspectiveEastablishes form, content, and requirements of financial statements

          

  3. Securities Exchange CommissionEstablished the SEC and established requirement for annual audited financial statements

          

  4. Statutory Lawliability concepts are developed through court decisions based on negligence, gross negligence, fraud, or breach of contract

          

  5. Controlling Litigationliability concepts are developed through court decisions based on negligence, gross negligence, fraud, or breach of contract