DeVry ACCT 444 Week 1-5 Complete Quizzes
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Discovering that Lowe, the chief financial officer of Perigee, started his accounting career 10 years earlier<br />
as a staff accountant for Jackson & Company and continues to maintain ties with current partners at the<br />
firm<br />
Provision of personal tax services to Johnson, the accounts payable manager of Perigee<br />
Audit of Perigee’s internal control is performed contemporaneously with the annual financial statement<br />
audit<br />
Preparation of Perigee’s routine annual tax return, where Jackson’s fee will be calculated as a percentage<br />
of the tax refund obtained<br />
<strong>ACCT</strong> <strong>444</strong> <strong>Week</strong> 2 Quiz<br />
<strong>Week</strong> 2 : Auditor Legal Liability, Fraud, & Audit Objectives – Quiz<br />
Question 1. 1. (TCO 4) To succeed in an action against the auditor, the client must be able to show that<br />
(Points : 3)<br />
the auditor was fraudulent.<br />
the auditor was grossly negligent.<br />
there was a written contract.<br />
there is a close causal connection between the auditor’s behavior and the damages suffered by the client.<br />
Chapter 5, 6 & 7<br />
1. (TCO 4) In connection with the audit of financial statements, an independent auditor could be<br />
responsible for failure to detect a material fraud if (Points : 3)<br />
statistical sampling techniques were not used on the audit engagement.<br />
the auditor planned the audit in a negligent manner.<br />
accountants performing important parts of the work failed to discover a close relationship between the<br />
treasurer and the cashier.<br />
the fraud was perpetrated by one employee who circumvented the existing internal controls.<br />
Question 2. 2. (TCO 4) The principal issue to be resolved in cases involving alleged negligence is usually<br />
(Points : 3)
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