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Flashcards in Business Law Deck (129)
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1

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

2

Is there a requirement for written communication for tax advice?

No, but it would be wise

3

Should a CPA warn clients about tax return consquences

Yes, it is required of SSTS No.1

4

Can a position lacking a reasonable basis be taken when properly discosled

No, it does not have a reasonable basis

5

If documentation is required for a deduction and the accountant doesn't ask for the documents can they be punished?

Yes

6

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?

No

7

Disclosure of estimates is not required in most situations (T/F)

True

8

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

9

Would a trustee who prepares a tax return for his trust be considered a TRP?

No

10

Reasonable basis that has a 25% chance or greater to be sustained should be disclosed (T/F)

True

11

Ultramares always look for what?

Privity

12

Proper delay of IRS request is only proper when...

the CPA believes after investigation in good faith the information is prvelaged

13

If a state board of accountancy takes away a CPA license, a CPA is automatically expelled from what?

AICPA

14

JEEP stands for what?

Joint Ethics Enforcement Program

15

Fraud liability runs to who?

Reasonable Foreseeable Parties

16

Negligence liability typically runs to who?

Limited class of parties the accountant knows will relay on the information

17

Negligence provides for what types of damages

Compensatory

18

Negligence does not provide for what type of damgages

Punitive

19

Constructive fraud is equal to what?

Gross Negligence

20

What is required for an accountant to be convicted under common law?

Make a misstatement with knowledge or recklessly make the misstatement

21

What is a good defense against negligence for an auditor?

The audit was performed under GAAS

22

Are CPA's liable for written and oral promises?

Yes, both

23

What can be a defense under common law liability

Lack of Scienter (Intent)

24

Scienter can be established by what?

1. Knowledge of material misstatement
2. Acted Recklessly

25

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

26

What must happen before a RICO suit for Securities Fraud can be brought?

The defendant must already be convicted of Securities fraud criminally

27

The accounting portion of FCPA is only required for who?

SEC Registrants

28

To be found guilty of Racketeering under the RICO act what must have occurred?

Conducted or Participated in the Conduct

29

Who recognizes accountant-client privilege?

Congress at 15 states

30

Exceptions to accountant-client privilege under IRC

1. Criminal Matters
2. Matter before IRS or Federal Court brought by or against the U.S.
3. Tax Advice on State and Local Matters
4. Written advice of Tax Shelters