part-a

1) Accountants need only be independent in fact. Independence in appearance is not important.

True or false

2) What are the auditor's responsibilities as it relates to fraud?

• a)Fraud audits are conducted as part of the normal audit engagement.

• b) Auditors are not responsible to detect fraud at any level. This is done with a separate fraud audit.

• c) Auditors are responsible to detect all fraud in an organization

• d) Auditors are responsible to detect material financial reporting fraud

3) Independence problems end as soon as partners retire, resign, or otherwise leave an accounting firm.

True or false

4) In Canada and the United States, ________ means any of several defendants that have caused part of the damages are liable to the plaintiffs for the entire amount of damages. This system was set up to protect plaintiffs from having to sue several different parties to recover the full amount of damages.

• a) joint and several liability

• b) negligence

• c) conducting business in a corporation

• d) burden of proof

5) What does a plaintiff have to prove to be successful in a negligence action against a public accountant (PA)?

• a) There must be a legal duty of care to the plaintiff and a breach in that duty.

• b) There must be a breach of duty of care

• c) There must be a legal duty of care, there must be a breach in that duty, there must be proof damages resulted and there must be a reasonably proximate connection between the breach and damage

• d) There must be proof damage resulted

6) Without integrity among its members, the profession cannot maintain its good reputation and serve the public interest.

True or False