Reference no: EM133312786
Assignment:
1. Although professionals are not guarantors of the accuracy of their work or that the advice they give to clients will work out well, they are bound by a general duty of performance to act with the requisite ____________________.
- patience and courtesy
- persistence and consideration
- intelligence and talent
- capacity and faculty
- skill and care
2. A professional's duty of performance requires that every professional demonstrate the level of skill of _____________________.
- the least educated member of her profession
- a reasonably skilled and knowledgeable adult
- the ordinarily prudent person in her profession
- the ordinarily prudent person
- the most educated member of her profession
3. To address the concern that auditing firms were not sufficiently independent from the firms they audited, the Sarbanes-Oxley Act created the __________________________ that is charged with adopting rules establishing auditing quality control, ethics, and independence standards.
- Committee for the Management of Auditing Firms
- Public Company Accounting Oversight Board
- Organization Administration
- Surveillance Board
- Supervision and Control Commission
4. When clients sue professionals, there are three principal bases of liability: __________, tort, and trust.
- constitutional law
- criminal law
- wills
- fidelity
- contract
5. Conrad is performing accounting work for his client Second Bank. If Conrad, acting with scienter, misstates or omits important facts that he discovers in this role, he may be liable to Second Bank for _________.
- innocent misrepresentation
- fraud
- verbal assault
- negligence
- breach of trust
6. The duty of trust requires a professional to ________________.
- always maintain accuracy in his work
- stay up-to-date on all professional standards
- act with scienter
- maintain the confidentiality of a client's information
- carefully examine current figures
7. The professional's duty to exercise reasonable care is a subset of the _________________ standard of tort law.
- strict liability
- presumed damages
- public plaintiff
- diligence
- negligence
8. To audit financial records, an accountant must know the generally accepted auditing standards (GAAS) and generally accepted accounting principles (GAAP). This is because professionals are required to have the education and knowledge of ________________.
- the most minimally informed person in their profession
- a highly educated member of the community
- the most well informed person in their profession
- the average person in society
- the ordinarily prudent person in their profession
9. The Sarbanes-Oxley Act created the Public Company Accounting Oversight Board (PCAOB) because it was concerned that __________________________.
- auditing firms were not sufficiently independent from the firms they audited
- accountants were breaching contractual obligations
- auditors were violating the duty of trust
- the suitability rules of the NASD were being violated
- the stock exchange's know-your-customer rule was not being adequately followed
10. If a professional breaches his duty of performance, a client may sue under one of three principal bases of liability: contract, trust, and _______.
- criminal law
- tort
- wills
- fidelity
- constitutional law
11. An accountant is liable for ________ when he intentionally or recklessly disregards accuracy in his work.
- negligence
- fraud
- abandonment
- tortious interference
- neglect
12. Steve, an accountant, is hired by Sandra, his neighbor, to do Sandra's tax return. Steve is surprised that Sandra's income is as high as it is and he discloses her income to a few of their other neighbors. Steve has likely violated the duty of _______ to Sandra.
- discretion
- fidelity
- trust
- skill
- care
13. A professional is required to meet a general duty of performance, which encompasses the specific duties of ____________.
- skill and care
- persistence and consideration
- patience and courtesy
- capacity and faculty
- intelligence and talent
14. Barbara, while performing as a professional accountant, is required to perform with degree of care of ________.
- the most well informed person in their profession
- the average person in society
- the most minimally informed person in their profession
- the ordinarily prudent person in their profession
- a highly educated member of the community
15. To ensure that audit firms are free from conflict-of-interest and lack of independence charges, the Sarbanes-Oxley Act bans ________________.
- contingency fee structures
- most nonaudit services by audit firms for their audit clients
- accountants from holding any shareholder interest in client companies
- an audit firm from hiring a past employee of a client
- conditional contracts between audit firms and clients
16. The three principal bases for professionals' liability to their clients are contract, tort, and ________.
- trust
- fidelity
- criminal law
- wills
- constitutional law
17. If an auditor finds obvious evidence of embezzlement but fails to notify his client of the embezzlement, the auditor may be liable to his client for ______.
- fraud
- neglect
- abandonment
- negligence
- tortious interference
18. A breach of the professional duty of ______ occurs when an accountant or securities broker uses the assets of his client for his own benefit.
- trust
- care
- discretion
- fidelity
- skill