1) Mary Chen purchased shares of Fly By Night Airlines in the secondary market. Subsequently Fly By Night went bankrupt. What statutory law applies to this transaction? What does Mary have to prove in a lawsuit against Fly By Nights auditors?

2) Explain the rule on integrity and objectivity. Give examples of conflicts of interest, knowingly misrepresenting facts, or subordinating judgment.

3) What independence problems are created when an audit manager is approached by a private company audit client, which he or she audits, to become the companys CFO? Are there appropriate safeguards that can be put in place to protect the audit firms independence.