Questions from Accounting Ethics

Q: Explain how the quality of corporate governance, risk management, and

Explain how the quality of corporate governance, risk management, and compliance systems are critical in controlling financial restatement risk within organizations.

Q: Rule 10b-5 is a regulation created under the Securities and

Rule 10b-5 is a regulation created under the Securities and Exchange Act of 1934 that targets securities fraud. Explain how the provision is applied in determining whether fraud has occurred including...

Q: Distinguish between the legal standards of negligence and recklessness.

Distinguish between the legal standards of negligence and recklessness.

Q: What must a plaintiff assert in a Section 11 claim under the

What must a plaintiff assert in a Section 11 claim under the Securities Act of 1933 to properly allege an “opinion” statement is materially misleading? When might certain financial statement items con...

Q: Revenue recognition in the Xerox case called for determining the stand-

Revenue recognition in the Xerox case called for determining the stand-alone selling price for each of the deliverables and using it to separate out the revenue amounts. Why do you think it is importa...

Q: Danny Boy, a local CPA who owns a tax practice,

Danny Boy, a local CPA who owns a tax practice, is being investigated by the IRS for the preparation of false income tax returns for a client. The IRS alleges that the individual taxpayer/client used...

Q: Do you believe the standard for liability under the PSLRA better protects

Do you believe the standard for liability under the PSLRA better protects auditors from legal liability than the standards which existed before the Act was adopted by Congress? Explain.

Q: How has the Sarbanes-Oxley Act affected the legal liability of

How has the Sarbanes-Oxley Act affected the legal liability of accountants and auditors?

Q: How does auditors’ meeting public interest obligations relate to avoiding legal liability

How does auditors’ meeting public interest obligations relate to avoiding legal liability?

Q: Distinguish between the legal standards of gross negligence and fraud.

Distinguish between the legal standards of gross negligence and fraud.