Quiz Wrong Answers Flashcards

0
Q

The best defense against a suit under section 11 1933 is…

A

Due care

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1
Q

Your firm has the task of auditing a large oil and gas company. You attend the meeting with the audit partner. What is the proper result of the meeting?2

A

1 audit partner discusses matters of significance with management
And
2 provides recommended solutions and ramifications of alternative disclosure and accounting treatment

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2
Q

Due care

A

Reasonable grounds to believe it’s client’s financial statements
Were accurate

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3
Q

Proof that the purchaser relied on financial statements is…

A

Not required to create liability under section 11 1933

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4
Q

Rather than being based on negligence, liability under Section 11 is based on…

A

Misstatement or omission

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5
Q

The audit firm has public SOX client for seven years. Has the firm audited the client for too many years?

A

No, as long as lead audit partner and review partner are rotated
Every 5 years

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6
Q

A single member LLC is eligible to file an election to be taxed as…2

A

1 a corporation or

2 a disregarded entity

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7
Q

I roll a partner in JKO Partnership, assigns its interest in the partnership to Trell, who is not made partner. Trell is the…

A

Assignee

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8
Q

An assignee has the right to…

A

Receive the assignor’s profits from the partnership

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9
Q

The assignee does not have the right to asset personal rights belonging to the original partner without…

A

Being formally admitted to the partnership

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10
Q

Personal rights belonging to an original partner include…3

A

1 right to vote
2 participate in management decisions
3 right to inspect books and records

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11
Q

If an audit firm audits a company with a going concern issue discovered on the audit and a supplier. The auditor cannot notify the supplier because…

A

Info is confidential and can’t be reported to supplier without client’s consent

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12
Q

On dissolution of a general partnership, distributions will be made to satisfy partner’s claims in which order?
1 partners’ capital accounts
2 amounts owed partners with respect to profits
3 amounts owed partners for loans to the partnership

A

Amounts owed partners for loans to partnership
Partners’ capital accounts
Amounts owed partners with respect to profits

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13
Q

The purpose of the Securities Act of 1933 is to…

A

Protect the unsophisticated investing public by requiring registration
Of securities prior to issuance

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14
Q

Registration involves…

A

Full disclosure of financial info

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15
Q

Detection of management fraud is not…

A

A purpose of the ‘33 Act

16
Q

What securities are regulated by the provisions of the securities act of 1933?

A

Securities issued by insurance companies

17
Q

Securities issued by savings and loans and similar financial institutions are…

A

Exempt from provisions of the 1933 act