Study Questions Law Contemporary Canadian Business Law CHAPTER 6
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Feb 20, 2024
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CHAPTER 6
1.
True or false: As per the legislation introduced by Province of Ontario in 2002,
only the directors of a publicly traded companies are liable for inaccurate public statements. FALSE
2.
Professional liability protects a professional from economic loss in the event
that his or her client suffers from injury due to the service(s) the professional provided
.
3.
A professional agrees to perform a service for a client. Under what circumstances can the client hold the professional liable for a foreseeable loss?
A professional agrees to perform a service for a client. Under what circumstances can the client hold the professional liable for a foreseeable loss
?
4.
A tortfeasor may be tried in
civil court.
criminal court.
5.
Professional fiduciary duty:
is often used as a guideline that provides the framework for the relationship between client and professional.
is a relationship in which a patient or client expects her or his interests will
be protected by a professional.
often holds a high standard of care.
6.
Which of the following act imposes the auditor to accurately prepare the financial statements of publicly traded corporations?
Sarbanes-Oxley Act
7.
A tort of negligence for professionals that protects them from economic loss in the event that their client suffers from injury due to the service(s) they have received is known as professional liability.
8.
A professional who fails to perform a contract or performs in a careless or negligent way is in
.
9.
The person or business committing a tort is known as a tortfeasor.
10.
A standard by which professionals have a legal responsibility to their client to
provide a service or advice in the best interest of their client without personal
gain is called a(n)
fiduciary duty.
11.
Donna is Clara's accountant. Donna follows generally accepted auditing standards ("GAAS") in preparing Clara's annual report. While conducting her audit, Donna thought she saw some evidence of fraud, but elected not to review the records further since she felt she had complied with GAAS. Which of the following is
true
?
BREACH
OF
CONTRACT
Donna breached her duty because once she saw the evidence, she needed to
do more than what GAAS requires.
12.
Professional liability protects a professional from economic loss in the event
Professional performs work that he/she is not qualified for.
13.
In which of the following scenarios would malpractice have been committed?
An accountant agrees to prepare tax documents for a corporation without disclosing no previous experience in preparing such documents. The corporation is later sued over the documents
.
14.
A brick falls off of a building and hits a passerby. Identify all who might be liable on the basis of profession.
General engineer.
Architect.
15.
A client asks a lawyer to draw up a contract. Within the particulars of the directions, the client is suggesting a minor illegal act. What are the lawyer's obligations?
Inform the client of the illegal portion of the contract and refuse to include it.
16.
How could an architect avoid liability that arises due to problems with construction? The architect can contract out of the obligation to supervise construction
.
17.
_______ suits provide victims compensation and encourage professionals to perform their duties according to the ______ of their professions.
Standards
Malpractice
18.
Professional malpractice lawsuits: _______.
can be based on a breach of contract
19.
Rory is Amy's accountant. When Rory prepared Amy's taxes, he was drunk and underreported her income. As a result, the IRS is auditing Amy and
fining her $10,000 for tax evasion. Which of the following is
true
about Rory's conduct? (Check ALL that apply.)
He failed to exercise due care.
Amy suffered a loss because of his incompetency.
20.
Several factors must exist in order to establish professional liability (negligence in a fiduciary relationship). Which of the following are included in these factors?
There is a breach of duty of care by the professional by which the client/patient, etc. suffered a loss.
One individual within the relationship is a professional, meaning he or she holds a duty of care.
The professional is in a position of power or trust and the client/patient,
etc. relies on the professional.
The professional did not reasonably foresee the loss suffered by the client/patient, etc. because of the conduct of the professional.
21.
What are the steps a businessperson could take to better understand the relationship between him or her and a professional?
Familiarize himself or herself with the standards of the profession
to which the professional belongs.
Outline specific fees for specific services in a contract or formal agreement.
22.
An accountant is liable for ______ if he or she ________ of a competent, reasonable accountant and that failure causes loss or injury to the client. (Choose TWO correct answers)
fails to exercise the care
negligence
23.
A feature that differentiates professional liability from other forms of negligence is
the professional did not meet or fell below the standard duty of care set by the profession.
24.
_______ suits provide victims compensation and encourage professionals to perform their duties according to the ______ of their professions.
Malpractice
Standards
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