Question 1

A professional should inform the client if expertise required for a certain matter should be sought from an alternate source.

Accepted Answer

It is important for a professional to be honest and transparent with their clients about their abilities and limitations. If a certain matter requires expertise that the professional may not possess, they should inform the client and suggest seeking help from an alternate source. This ensures that the client receives the best possible service and avoids any potential legal or ethical issues.

Question 2

As a result of its role in the Enron affair,the accounting firm of Arthur Andersen was charged with the criminal offence of obstruction of justice based on alleged concealment and destruction of key documents.These charges were possible because professional-client privilege only governs lawyer-client relationships.

Accepted Answer

Professional-client privilege only applies to lawyer-client relationships and does not protect accounting firms from charges of criminal offenses, such as obstruction of justice. This was evident in the case of Arthur Andersen's involvement in the Enron scandal.

Question 3

Professional service contracts define the parameters of the work that professionals are engaged to do,provided all essential terms have been included in the agreement at the time it was created.

Accepted Answer

Professional service contracts should clearly define the work to be done and all essential terms should be included in the agreement at the time it is created to ensure clarity and enforceability.

Question 4

When shareholders use audited statements as the basis for their investment decisions,court-imposed policy has shaped the law to consider this use outside the intended statutory purpose of the audit.In so doing,the courts have allowed the professional to be released from any duty of care to these individuals for any investment losses incurred as a result of reliance on the audit.

Accepted Answer

The statement suggests that courts have allowed auditors to be released from duty of care towards shareholders who rely on audited statements for investment decisions.

Question 5

Although courts have traditionally denied the claims of third parties who suffered economic loss as a result of reliance on a professional's negligent misstatements,modern public intolerance of white collar crime has begun to override the court's underlying policy of protecting the professions.

Accepted Answer

The sentence states that modern public intolerance of white collar crime has begun to override the court's underlying policy of protecting the professions, indicating that courts are beginning to allow claims of third parties who suffered economic loss as a result of reliance on a professional's negligent misstatements.

Question 6

The potential for third-party claims for economic loss resulting from negligent misrepresentations was first recognized in Canada in 1964.

Accepted Answer

The answer of The potential for third-party claims for economic...

Question 7

Limited Liability Partnerships were originally introduced to Canadian society through the federal government's amendment of the Canada Business Corporations Act.

Accepted Answer

Limited Liability Partnerships were actually first introduced in Canada at the provincial level, with Alberta being the first province to enact legislation in 1985. The federal government did later amend the Canada Business Corporations Act to include provisions for Limited Liability Partnerships, but it was not the original introduction of this business structure in Canada.

Question 8

In very limited circumstances,a professional duty of confidentiality must be violated when a patient tells her doctor that she is going to either hurt herself or intends to cause harm another.

Accepted Answer

This is known as the duty to warn or duty to protect and is a legal and ethical obligation for healthcare professionals to disclose information to protect the safety of others. However, this disclosure should be limited to only those who need to know and should be done in a way that respects the patient's privacy as much as possible.

Question 9

The least difficult cases are those in which professionals give careless advice or make misrepresentations causing negative economic consequences to third parties.

Accepted Answer

The answer of The least difficult cases are those in...

Question 10

The self-regulating model applied to professions has come under attack for its alleged failure to protect the public interest by the sacrifice of professional accountability in favour of self-interest and protection of members.

Accepted Answer

The statement accurately reflects the criticism of the self-regulating model applied to professions.

Question 11

The fiduciary must comply with the spirit of the obligations owed by it and not merely the letter.

Accepted Answer

This statement is true. Fiduciaries have a duty to act in the best interest of their clients and to avoid conflicts of interest. Compliance with the letter of the obligations is not enough, the fiduciary must also fulfill the spirit of those obligations.

Question 12

In order to maximize the utility and manage the risk inherent to the engagement of professional services,business clients need knowledge of the workings of professional bodies.

Accepted Answer

Business clients need to know the workings and regulations of professional bodies to choose the right professionals, understand the scope of their services, and manage the risks associated with their engagement. This knowledge can help clients make informed decisions, negotiate fair contracts, and ensure compliance with professional standards and ethical rules.

Question 13

In order to advance a claim for professional negligence,the defendants must be in a position to prove the requisite causation and lack of remoteness of damage.

Accepted Answer

The answer of In order to advance a claim for...

Question 14

The most contentious issues relating to professionals tend to be those relating to quality of service and fees.

Accepted Answer

Quality of service and fees are often the most debated topics when it comes to professional services, as clients typically expect a high standard of service while also wanting to ensure that they are not overcharged for the services provided.

Question 15

The recent removal of interprovincial barriers to professional practice will only prove themselves to be beneficial to Canadian society if the professionals are actually competent with various differing legal procedures,forms,and laws in each of the provinces the professional purports to practise in.

Accepted Answer

Without proper knowledge of legal procedures, forms, and laws in each province, the removal of interprovincial barriers to professional practice may lead to incompetence and potential harm to Canadian society.

Question 16

If a contract price is not stated in a professional services contract,the principle of quantum meruit will be deemed to be inapplicable.

Accepted Answer

Quantum meruit is a principle that allows a party to recover the reasonable value of services provided when a contract does not specify a price, making it applicable even when a contract price is not stated.

Question 17

In the case of a negligently prepared audit,a reasonably foreseeable use and reliance by a number of individual third parties establishes that the professional's duty of care exists.By applying the judiciary's imposed policy considerations at the second step of the test,the court is able to shield the professional from liability by limiting the use of the audit to its statutory purpose.

Accepted Answer

This statement correctly describes the two-step legal test used to establish a professional's duty of care in cases of negligently prepared audits. The first step establishes the existence of a duty based on a reasonably foreseeable use and reliance by third parties, while the second step considers policy considerations to limit the scope of the professional's potential liability.

Question 18

An advance payment requested by a professional from a client is typically required prior to the professional performing any work on the client's behalf.

Accepted Answer

This is commonly known as a retainer fee and is a standard practice in many industries, such as law and accounting, to ensure payment and secure the professional's services.

Question 19

Where shareholders have detrimentally relied on a negligently prepared professional audit to make investment decisions,their only recourse against the professional is their indirect right to bring a derivative action on behalf of the company.

Accepted Answer

Shareholders cannot sue the auditor directly for negligence, but they can bring a derivative action on behalf of the company if they have suffered harm due to the auditor's negligence.

Question 20

Self-regulating professions are empowered by special statutes to create a governing body for themselves and to specify when individuals may represent themselves as being qualified to practise in a particular province.

Accepted Answer

Self-regulating professions, such as lawyers and doctors, do have special statutes that empower them to create their own governing bodies and establish standards for qualification to practice within a particular province or jurisdiction. This allows them to regulate their own profession and ensure that individuals who represent themselves as qualified practitioners meet certain standards and requirements.

Quiz 22: Professional Relationships