Test 2 Study Guide
1. Is fraud only prosecuted criminally or are there other methods to prosecute for fraud? a. Fraud may be prosecuted criminally or civilly.
2. What is the standard by which law enforcement making arrest adhere to? a. Probable cause
3. What makes evidence admissible in court?
a. Evidence is admissible in court if it is relevant, its probative value outweighs any prejudicial effects, and it is trustworthy, meaning that it is subject to examination and cross-examination. 4. Who is responsible for the auditing of public companies under Sarbanes Oxley? a. Public Company Accounting Oversight Board (PCAOB)
5. What does the Sarbanes Oxley act do or address?
a. Establish higher standards for corporate governance and accountability, create an independent regulatory framework for the accounting profession, enhance the quality and transparency of financial reports, develop severe civil and criminal penalties for corporate wrongdoers, and establish new protections for corporate whistleblowers. b. It addresses corporate governance and accountability as well as public accounting responsibilities in improving the quality, reliability, integrity, and transparency of financial reports. 6. What does the PCAOB do?
a. Register public accounting firms that prepare audit reports for issuers. b. Establish, or adopt, by rule, auditing, quality control, ethics, independence, and other standards relating to the preparation of audit reports for issuers. c. Conduct inspections of registered public accounting firms. d. Conduct investigations and disciplinary proceedings and impose appropriate sanctions. e. Enforce compliance with the act, the rules of the board, and other applicable rules and regulations. f. Establish budget and manage the operations of the board and its staff. 7. Is it required that the external auditors attest to issue a report on managements internal controls a. It recommends and requires
8. Under Sarbanes Oxley, is it unlawful for an officer or director to mislead an auditor? a. Yes
9. Does Sarbanes Oxley mandate each member of its audit committee also be a member of its board and be independent a. Yes
10. What is a Miranda warning
a. The interviewee has a right to remain silent
b. The interviewee’s answers may be used against him
c. The interviewee has a right to an attorney
d. If the interviewee cannot afford an attorney, one will be provided at no cost e. The interviewee can decide at any time to invoke these rights 11. What does good cause include?
a. The employee’s conduct was against written policy
b. The employee’s conduct made for unsafe or inefficient business operations c. The company completed a reasonable investigation to ensure that any such questionable act was committed by the employee and has evidence to support such a claim d. The investigation was fair, objective, and evidence suggested the elimination of alternative suspects e. The termination was nondiscriminatory, meaning that all persons committing such an act were or would be terminated f. The punishment fits the crime, meaning that the punishment is reasonable given the nature of the offense g. Good cause is advisable so they protect themselves against being sued 12. What are the different legal privileges?
a. Attorney-Client privilege
b. Attorney work-product privilege
c. Physician-patient privilege
d. Marital privileges
e. Miscellaneous privileges
13. How can investigators obtain evidence?
a. Voluntary consent
c. Search warrant
14. What is the normal order of discovery? What steps can be taken and in what order can they be taken? a. Initially, interrogatories are passed to the opposing council. Interrogatories are questions that require answers and those answers become part of the testimonial record. b. Subsequent to interrogatories, opposing parties submit “requests to produce documents” to one another c. Third, attorneys start to take sworn testimony from opposing parties in the...
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