Ethics

Question 1

If error is immaterial, does client have to be notified?

Answer 1

No

Question 2

The fact that use of estimates is disclosed is not one of the requirements for using estimates. T or F.

Answer 2

True

Question 3

A position that lacks a reasonable basis may not be taken. T or F.

Answer 3

True

Question 4

Is a trustee who prepares a tax return considered a tax return preparer (TRP)?

Answer 4

No

Question 5

What would support a finding of constructive fraud on the part of a CPA?

Answer 5

Gross negligence in applying generally accepted auditing standards

Question 6

If a position meets realistic possibility standard, what must happen?

Answer 6

Taken without disclosure per SSTS 1

Question 7

The intent, or scienter, necessary to establish a cause of action for fraud will be met if the plaintiff can show that the…

Answer 7

Defendant made a misrepresentation with reckless disregard for the truth.

Question 8

Is a CPA negligent when he fails to correct errors that were discovered in the CPAs previously issued audit report?

Answer 8

Yes

Question 9

Is emailing invoices wire fraud?

Answer 9

Yes

Question 10

Can a RICO claim involving securities fraud be pursued before defendant is found guilty of securities fraud?

Answer 10

No

Question 11

When is accountant-client testimonial privilege recognized?

Answer 11

By congress for very limited purposes when tax practitioners are involved and by approximately 15 state legislatures

Question 12

Can a CPA firm disclose the names of clients without permission?

Answer 12

Yes unless disclosure would suggest that the client may be experiencing financial difficulties.