Question

Match seven of the terms (a-n) with the definitions provided below (1-8):

a.         Foreign Corrupt Practices Act.

b.         Securities Exchange Act of 1934.

c.         Racketeer Influenced and Corrupt Organization Act.

d.         Securities Act of 1993.

e.         Ultramares doctrine.

f.          Audit risk.

g.         Audit failure.

h.         Standards failure

i.          Business failure

j.          Absence of causal connection

k.         Contributory negligence

l.          Lack of duty to perform

m.        Private Securities Litigation Reform Act

n.         Nonnegligent performance

__________1. A situation in which the auditor issues an erroneous audit opinion as the result of an underlying failure to comply with the requirements of generally accepted auditing standards.

__________2. A federal dealing with companies that trade securities on national and over the counter exchanges. Auditors are involved because the annual reporting requirements include audited financial statements

__________3. An auditor’s legal defense under which the auditor claims that the client failed to perform certain obligations and that it is the client’s failure to perform those obligations that brought about the claimed damages

__________4. A federal statute that makes it illegal to offer bribe to an official of a foreign country

__________5. a common law approach to third-party liability in which ordinary negligence is insufficient for liability to third parties, because of the lack of privity of contract between the third party and the auditor unless the third party is a primary beneficiary.

__________6. A federal statute design to discourage fraud, extortion, and other activities, under which an injured party may recover treble damages and legal fees.

__________7. An auditor’ legal defense under which the auditor claims that the audit was performed in accordance with generally accepted auditing standards.

__________8. An auditor’ legal defense under which the auditor contends that the damages claimed by the client were not brought about by any act of the auditor

Answer 1

Answer to first four Questions is as follows:

g	Audit failure.	1	A situation in which the auditor issues an erroneous audit opinion as the result of an underlying failure to comply with the requirements of generally accepted auditing standards.
b	Securities Exchange Act of 1934	2	A federal dealing with companies that trade securities on national and over the counter exchanges. Auditors are involved because the annual reporting requirements include audited financial statements
i	Business Failure	3	An auditor’s legal defense under which the auditor claims that the client failed to perform certain obligations and that it is the client’s failure to perform those obligations that brought about the claimed damages
a	Foreign Corrupt Practices Act	4	A federal statute that makes it illegal to offer bribe to an official of a foreign country