Question 1: When an accountant has conducted an audit with reckless disregard for the accuracy of the financial statements, the accountant has committed:
a. actual fraud. b. strict liability carelessness. c. privity of the contract. d. constructive fraud.
Question 2: The contractual arrangement of an accountant with the client is often referred to as a(n):
a. matter. b. undertaking. c. engagement. d. procedure. e. project.
Question 3: Which of the following is true when someone accidentally makes an improvement to the personal property of another where the owner was unaware of the improvement until after it had been made?
a. The property owner gets to keep the improvement in all cases, but must pay the party who improved it the reasonable value of the improvement.
b. The party who made the improvement can remove it if this is possible, otherwise the owner of the property gets to keep the improvement and is not required to pay for it.
c. The property owner gets to keep the improvement in all circumstances and is not required to pay for it.
d. The party who made the improvement can remove it if this is possible, otherwise the owner of the property gets to keep the improvement and must pay the party who improved it the reasonable value of the improvement.
Question 4: Peter runs an auto air conditioning repair shop. Because of the phase-out of the ozone-depleting refrigerants used in older auto air conditioners, auto air conditioning repairers have become subject to numerous new laws and regulations, some of which are costly and burdensome with which to comply. Although it costs him more, Peter decides to follow all the statutes and regulations so long as everyone else does the same. Peter has reached his decision in accordance with:
a. ethical relativism. b. utilitarianism. c. ethical fundamentalism. d. Kantian ethics. e. Rawls's distributive justice theory.
Question 5: The procedure that an accountant performs to determine whether the financial statements of a business are materially accurate is a(n):
a. review. b. verification. c. audit. d. compilation. e. account sampling.