Flashcards in Business Law Deck (129)
3 ways that an Accountant can charge Contingent fees for a tax client
1. IRS Examination
2. Where a claim for refund is solely in connection with determination of statutory interest or penalties
3. Representing the client in judicial proceedings
Is there a requirement for written communication for tax advice?
No, but it would be wise
Should a CPA warn clients about tax return consquences
Yes, it is required of SSTS No.1
Can a position lacking a reasonable basis be taken when properly discosled
No, it does not have a reasonable basis
If documentation is required for a deduction and the accountant doesn't ask for the documents can they be punished?
If a tax position is "more likely than not" that it will be sustained if challenged is the accountant required to inform the client about the disadvantages?
Disclosure of estimates is not required in most situations (T/F)
Tax Return prepare is required to give their ID number to whom and who not
Must give to IRS, not required to give to client
Would a trustee who prepares a tax return for his trust be considered a TRP?
Reasonable basis that has a 25% chance or greater to be sustained should be disclosed (T/F)
Ultramares always look for what?
Proper delay of IRS request is only proper when...
the CPA believes after investigation in good faith the information is prvelaged
If a state board of accountancy takes away a CPA license, a CPA is automatically expelled from what?
JEEP stands for what?
Joint Ethics Enforcement Program
Fraud liability runs to who?
Reasonable Foreseeable Parties
Negligence liability typically runs to who?
Limited class of parties the accountant knows will relay on the information
Negligence provides for what types of damages
Negligence does not provide for what type of damgages
Constructive fraud is equal to what?
What is required for an accountant to be convicted under common law?
Make a misstatement with knowledge or recklessly make the misstatement
What is a good defense against negligence for an auditor?
The audit was performed under GAAS
Are CPA's liable for written and oral promises?
What can be a defense under common law liability
Lack of Scienter (Intent)
Scienter can be established by what?
1. Knowledge of material misstatement
2. Acted Recklessly
FCPA requires what 4 items?
1. Transactions are executed with management's instructions
2. Transactions are recorded to properly prepare financial statements and maintain accountability for assets
3. Access to assets is authorized
4. Recorded assets are compared to existing assets on a requital interval
What must happen before a RICO suit for Securities Fraud can be brought?
The defendant must already be convicted of Securities fraud criminally
The accounting portion of FCPA is only required for who?
To be found guilty of Racketeering under the RICO act what must have occurred?
Conducted or Participated in the Conduct
Who recognizes accountant-client privilege?
Congress at 15 states