10/18/23,
11:16
PM
Lesson
07
Quiz
Due
Oct
24
at
11:59pm
Points
10
Questions
10
Available
until
Oct
24
at
11:59pm
Time
Limit
None
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Unlimited
Instructions
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but
not
all,
of
the
responses
have
explanations
for
why
they
are
correct
or
incorrect.
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Lesson
07
Quiz:
ACC
450:
Principles
of
Auditing
(2023
Fall
-
B)
Question
1
1/1
pts
Which
of
the
following
are
the
biggest
threats
faced
by
auditors?
Legal
claims
and
independence
violations
Correctl
)
Legal
claims
and
PCAOB
inspections
https://canvas.asu.edu/courses/159839/quizzes/1199854
1/7
10/18/23,
11:16
PM
Lesson
07
Quiz:
ACC
450:
Principles
of
Auditing
(2023
Fall
-
B)
"
Nice
job!
Review
page
104
of
the
text
for
information
on
the
biggest
-
threats
faced
by
auditors.
Now
get
back
to
work.
Legal
claims
and
economic
downturns
Legal
claims
Question
2
1/1
pts
Which
of
the
following
potential
plaintiffs
may
not
usually
sue
the
auditors
for
a
breach
of
contract?
A.
The
company
B.
The
company's
creditors
C.
The
company's
investors
Correctl
'
B&C
(
"
Nice
job!
Review
pages
104-105
of
the
text
which
explain
who
can
-
sue
an
audit
firm
and
why.
Now
get
back
to
work.
Question
3
1/1pts
Which
of
the
following
factors
generally
mitigate
litigation
risks
faced
by
the
auditors?
Plantiffs
generally
do
not
want
auditors
to
go
bankrupt
https://canvas.asu.edu/courses/159839/quizzes/1199854
2/7
10/18/23,
11:16
PM
Lesson
07
Quiz:
ACC
450:
Principles
of
Auditing
(2023
Fall
-
B)
Plaintiff
attorneys
have
negative
consequences
for
filing
frivolous
lawsuits
against
auditors
Auditors
can
generally
get
liability
insurance
to
cover
legal
claims
Correctl
)
All
of
the
above
i
Nice
job!
Review
page
106
of
the
text
for
information
on
mitigating
~
litigation
risks.
Now
get
back
to
work.
Question
4
1/1pts
When
a
lawsuit
is
filed
against
a
Big
4
audit
firm,
which
of
the
following
is
generally
true?
A.
The
firm
is
very
concerned
about
the
negative
publicity
from
the
lawsuit
Correct!
)
B.
The
firm
considers
the
lawsuit
to
be
normal
cost
of
audit
business
——
(
-
Nice
job!
Review
pages
106-108
of
the
text
for
information
on
what
auditors
are
concerned
about
with
respect
to
lawsuits
against
their
-
firm.
Now
get
back
to
work.
C.
The
firm
has
an
insurance
policy
to
cover
most
of
the
loss
A&B
Question
5
1/1
pts
When
a
lawsuit
is
filed
against
a
small
audit
firm,
which
of
the
following
is
generally
true?
https://canvas.asu.edu/courses/159839/quizzes/1199854
3/7
10/18/23,
11:16
PM
Lesson
07
Quiz:
ACC
450:
Principles
of
Auditing
(2023
Fall
-
B)
A.
The
firm
is
very
concerned
about
the
negative
publicity
from
the
lawsuit
B.
The
firm
considers
the
lawsuit
to
be
normal
cost
of
audit
business
C.
The
firm
has
an
insurance
policy
to
cover
most
of
the
loss
Correctl
)
A&C
——
Nice
job!
Now
get
back
to
work.
Review
pages
106-108
of
the
text
for
information
on
what
auditors
are
concerned
about
with
respect
to
lawsuits
against
their
firm.
—
Question
6
1/1
pts
Which
of
the
following
methods
are
used
by Big
4
to
mitigate
monetary
losses
from
audit
litigation?
Setting
up
their
own
dedicated insurance
companies
Transferring
part
of
their
income
to
their
own
dedicated insurance
companies
Obtaining
third
-
party
insurance
to
cover
catastrophic
losses
Correct!
)
All
of
the
above
——
Nice
job!
Review
page
108
of
the
text
for
information
on
how
Big
4
~
firms
mitigate
monetary
losses
from
audit
litigation.
Now
get
back
to
-
work.
S
—
Question
7
1/1
pts
https://canvas.asu.edu/courses/159839/quizzes/1199854
4/7
10/18/23,
11:16
PM
Correct!
Lesson
07
Quiz:
ACC
450:
Principles
of
Auditing
(2023
Fall
-
B)
Which
of
the
following
does
a
plaintiff
need
to
show
when
suing
an
auditor
under
The
SEC
Act
of
19337
A.
The
auditor
was
negligent
B.
The
plaintiff
suffered
a
loss
C.
The
financial
statements
were
misleading
'
B&C
——
-
Nice
job!
Review
pages
114-115
for
information
on
what
the
plaintiff
(
)
|
|
-
must
show
when
suing
an
auditor
under
The
SEC
Act
of
1933.
Now
get
back
to
work.
\
Question
8
1/1
pts
Correct!
Which
of
the
following
does
an
auditor
need
to
show
when
being
sued
under
The
SEC
Act
of
19337
The
company
management
bears
the
primary
responsibility
for
the
financial
statements
The
plaintiff
was
not
mentioned
in
the
audit
agreement
The
plaintiff
has
a
history
of
filing
frivolous
lawsuits
)
None
of
the
above
’
Nice
job!
The
auditor
must
show
they
performed
the
audit
without
!
ordinary
negligence.
Review
page
115
for
information
on
what
the
:
auditor
must
show
when
being
sued
under
The
SEC
Act
of
1933.
-
Now
get
back
to
work.
https://canvas.asu.edu/courses/159839/quizzes/1199854
SI7
10/18/23,
11:16
PM
Lesson
07
Quiz:
ACC
450:
Principles
of
Auditing
(2023
Fall
-
B)
Question
9
1/1
pts
Correctl
Correctl
Which
of
the
following
statements
is
correct
about
mediation?
Mediation
is
another
term
for
arbitration
®
Mediation
is
a
mechanism
to
help
the
auditor
and
the
plaintiff
negotiate
a
settlement
out
of
court
—
-
Nice
job!
Review
page
108
of
the
text
for
information
on
mediation.
|
Now
get
back
to
work.
Usually
auditors
try
arbitration
first
and
then
go
to
mediation
B&C
Question
10
11/1
pts
Which
of
the
following
statements
is
correct
about
arbitration?
)
Arbitration
decisions
are
final
and
cannot
be
appealed
"
Nice
job!
Review
page
108
of
the
text
for
information
on
arbitration.
-
Now
get
back
to
work.
Arbitration
is
a
mechanism
where
attorneys
are
called
arbitrators
Both
auditors
and
plaintiffs
prefer
arbitration
over
the
other
mechanisms
of
claim
resolution
https://canvas.asu.edu/courses/159839/quizzes/1199854
6/7
10/18/23,
11:16
PM
Lesson
07
Quiz:
ACC
450:
Principles
of
Auditing
(2023
Fall
-
B)
All
of
the
above
Quiz
Score:
10
out
of
10
https://canvas.asu.edu/courses/159839/quizzes/1199854
717
