8-As set forth in the case in the text, Bily. Arthur Young & Co, which of the following is true regarding auditor liability to third parties under the Restatement rule? An auditor retained to conduct an annual audit and to furnish an opinion for no particular purpose generally undertakes no duty to third parties. An auditor retained to conduct an annual audit and to furnish an opinion for no particular purpose does undertake a duty to any foreseeable third party Users An auditor retained to conduct an annual audit and to furnish an opinion for no particular purpose undertakes a duty only to third parties who are financial institutions An auditor retained to conduct an annual audit and to furnish an opinion for no particular purpose generally undertakes a duty only to directors of the company who provide loans to the company An auditor retained to conduct an annual audit and to furnish an opinion for no particular purpose generally undertakes no duty to third parties except for financial institutions and also directors who provide loans to a company 14-Which statement accurately describes the requirements regarding working papers under the Sarbanes-Oxley Act of 20027 Accountants must maintain working papers for ten years starting with the end of the fiscal period in which the audit was conducted. Accountants must maintain working papers for seven years starting on the last day of the audit. O Accountants must maintain working papers for five years starting with the end of the fiscal period in which the audit was conducted. O Accountants must maintain working papers for one year starting on the last day of the audit. The act does not require that accountants maintain working papers. 16-When does the attomey-client privilege apply to accountants? Always, because both the accountant and attorney would be paid experts I Almost always, it depends on what percentage of the work the attorney might see in disclosing Information to the accountant Never, attorney-client privilege is only between the attorney and the client and can never be extended to the accountant Under limited circumstances if the communication between the accountant and the client is made in confidence for the purpose of obtaining legal advice from the attorney It depends - a court has to make the determination if there is privity of relationship to extend the privilege 17- Which of the following is false regarding the Private Securities Litigation Reform Act? The act sets forth a specific set of actions and guidelines an accountant must follow after identifying a potentially illegal activity when conducting an audit The act makes no reference to notifying the SEC of wrongdoing although it does reference notifying the applicable company's board of directors. The act states that accountants are liable for the portion of the damages for yohich they are responsible In the event of a willful Violation of the act, the SEC can seek an injunction against the accountant Under the act, an accountant's silence when the accountant thinks he or she might have discovered fraud is enough to constitute aiding and abetting 19- For which of the following does the Securities Exchange Act impose liability? Fraudulent statements made to the SEO Fraudulent statements made to courts Fraudulent statements made to a client in connection with performing an audit Negligence in performing an audit or in the construction of a financial statement Fraud in performing an audit. 20-An accountant's failure to fulfill obligations under GAAP and GAAS is considered prima facie evidence of what? a failure of due diligence negligence an affirmative defense indirect evidence of malpractice misleading the SEC Yousef Aldaboon 22-Section 11 of the Securities Act creates a duty for accountants to perform their tasks with efficiency no errors or omissions. accuracy and efficiency due diligence reasonableness. 23-An insurance policy that covers a person for errors or omissions made in the course of carrying out his or her professional responsibilities is sometimes referred to as alo) O professional malpractice policy O professional indemnification and malpractice policy errors and omissions policy I O professional errors policy deductible policy 24-Besides attomeys, who else may be held liable in a malpractice action? Doctors only Doctors and accountants only Doctors, real estate brokers, and accountants I Real estate brokers but not accountants Only lawyers can be sued for malpractice 25-Under most professional indemnity insurance policies, which of the following must be true in order for a claim to be covered? A policyholder must be insured at the time the claim arose or at the time the claim is filed. A policyholder must be insured at the time the claim arose, but does not need to be insured at the time the claim is filed. A policyholder must be insured at the time the claim arose and at the time the claim is filed. A policyholder must be insured at the time the claim is filed, but does not need to be insured at the time the claim arose. A policyholder need only show evidence of current payment of policy premiums. ssessment Saved Help Save & E As set forth in the case in the text, Bily Arthur Young & Co, which of the following is true regarding auditor liability to third parties under the Restatement rule? Multiple Choice An auditor retained to conduct an annual audit and to furnish an opinion for no particular purpose generally undertakes no duty to third parties An auditor retained to conduct an annual audit and to furnish an opinion for no particular purpose does undertake a duty to any foreseeable third-party users An auditor retained to conduct an annual audit and to furnish an opinion for no particular purpose undertakes a duty only to third parties who are financial institutions An auditor retained to conduct an annual audit and to furnish an opinion for no particular purpose generally undertakes a duty only to directors of the company who provide loans to the company An auditor retained to conduct an annual audit and to furnish an opinion for no particular purpose generally undertakes no duty to third parties except for financial institutions and also directors who provide loans to a company arch 0