ACCT 444 Week 2 Quiz

Question 3. 3. (TCO 4) While performing services for their clients, professionals have a duty to provide a level of care that is (Points
free from judgment errors.
superior.
greater than average.
reasonable.
Chapter 5
3. (TCO 4) A third-party beneficiary is one that (Points : 3)
has failed to establish legal standing before the court.
does not have privity of contract and is unknown to the contracting parties.
does not have privity of contract, but is known to the contracting parties and intended to benefit under the contract.
may establish legal standing before the court after a contract has been consummated.
Chapter 5
Question 4. 4. (TCO 4) Tort actions against CPAs are more common than breach of contract actions because (Points : 3)
there are more torts than contracts.
the burden of proof is on the auditor rather than on the person suing.
the person suing need prove only negligence.
the amounts recoverable are normally larger.
Chapter 5
Question 5. 5. (TCO 4) The responsibility for adopting sound accounting policies and maintaining adequate internal control rests with
board of directors.
company management.
financial statement auditor.
company’s internal audit department.
Chapter 6
Question 6. 6. (TCO 3) Which of the following is not one of the reasons that auditors provide only reasonable assurance on the financ
The auditor commonly examines a sample, rather than the entire population of transactions.
Accounting presentations contain complex estimates, which involve uncertainty.
Fraudulently prepared financial statements are often difficult to detect.
Auditors believe that reasonable assurance is sufficient in the vast majority of cases.
Chapter 6