Deck 63: Accounting and Ethics

Question 1

Denver Corporation is a U.S. firm that does business internationally. Among the ethical challenges facing Denver and other firms is the role of women be?cause some countries

A) accept any professional role for women.
B) expect any professional role for women.
C) protect any professional role for women.
D) reject any professional role for women.

Answer 1

C

Question 2

Kelvin is an accountant. As an accountant, Kelvin may be liable for violations of

A) consumer protection statutes only.
B) consumer protection statutes, securities laws, and tax laws.
C) securities laws only.
D) tax laws only.

Answer 2

B

Question 3

Equity Insurance Company issues a policy to Financial Holding Company (FHC) against "physical loss or damage from any cause." A power outage causes FHC to lose its computer data. FHC asks Equity to cover the costs arising from the computer downtime. When Equity refuses, FHC files a suit. The court is most likely to rule that "physical loss or damage"

A) does not include any costs associated with computer downtime.
B) includes loss of computer access, use, and functionality.
C) includes physical destruction or harm to computer circuitry only.
D) includes no loss or damage associated in any way with computers.

Answer 3

B

Question 4

Beau is an insurance agent. As an agent, Beau is liable for failing to advise a client of

A) every possible insurance option.
B) every reasonable insurance option.
C) every significant insurance option.
D) none of the choices.

Question 5

Uriah, an accountant, concludes an audit of Visual Signage Company by issuing an opinion letter that states the financial statements accurately reflect Visual's financial position. Later, Uriah discovers that the opinion was based on inaccurate data. According to the court's decision in Overton v. Todman & Co., CPAs, with respect to the opinion Uriah has

A) a duty to correct.
B) a duty to correct only if Uriah was also responsible for the false data.
C) no duty to correct, but a duty to file a suit against Visual.
D) no duty to correct or file a suit.

Question 6

Loki, an accountant, concludes an audit of Medical Equipment Company (MEC) by issuing an opinion letter that states the financial statements accurately reflect MEC's financial position. Later, Loki discovers that the opinion was based on inaccurate data. In light of the court's decision in Overton v. Todman & Co., CPAs, with respect to the opinion Loki presumably has

A) an ethical duty to correct.
B) an ethical duty to correct only if Loki is responsible for the false data.
C) no ethical duty to correct, but a legal duty to file a suit against MEC.
D) no ethical duty to correct or file a suit.