Exam 34: Liability of Accountants Other Professionals

Lars accuses Moe, an attorney, of committing malpractice. Malpractice is

The Sarbanes-Oxley Act applies to domestic, but not foreign, public accounting firms that provide auditing services to "issuers."

Estes, an accountant, contracts to perform services for Frasier. In performing those services, Estes uncovers a suspicious financial transaction. Estes is most likely not liable if he

Professionals are obligated to adhere to standards of performance generally accepted within their profession.

Flynn, an accountant, helps Grange Supply Company prepare and file a false federal corporate income tax return. Under the Internal Revenue Code, this is

Pluto accuses Quark, an accountant, of committing defalcation. This is

Each state establishes rules that govern the conduct of attorneys

Filtration Products, Inc., files a suit against Emmett, its former accountant, alleging constructive fraud. Emmett may be held liable

Bryce's accountant is Caleb and his attorney is Delilah. All states protect, as privileged information, Bryce's communications with

Lacy is an accountant who prepares her clients' tax returns. Muff is not an accountant, but he also prepares tax returns for clients. Under the Internal Revenue Code, liability for preparing a false return may be imposed on

A qualified opinion must be specific and identify the reason for the qualification.

Under the Sarbanes-Oxley Act, accountants must retain working papers relating to an audit or review for a certain period of time.

An accountant's liability under the Securities Act of 1933 requires privity of contract with the purchaser of a security.

Lulu, an accountant, conducts an audit of Microstuff Toys, Inc. After the conclusion of the audit, the working papers created in preparing the audit must be

Grover Nut Company files a suit against Hud, its former accountant, alleging actual fraud. Grover must prove

An accountant is not liable for a misleading statement that affects the price of a security if the accountant acted in good faith.

Tiny is an accountant. Tiny's violation of generally accepted accounting principles and generally accepted auditing standards

Jaime, an accountant, contracts to perform services for Kase. Jaime acts in good faith and conforms to generally accepted accounting principles, but makes a mistake in judgment. Jaime is most likely

Dwayne can be described as "a reasonably competent general practitioner of ordinary skill, experience, and capacity." This is the normal standard for judging the performance of

Pace is an attorney, whose clients include Quikfeet Running Shoes Company. Unless Quikfeet has violated securities law, the contents of Pace's file on Quikfeet may be disclosed to someone other than Quikfeet