Summary Class notes - Business Law

- Business Law
- Badder
- 2017 - 2018
- Towson University
- law and american civilization
242 Flashcards & Notes
1 Students
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Summary - Class notes - Business Law

  • 1487026800 Chapter 27

    Public company accounting oversight board
  • Sarbanes-Oxley Act of 2002
    public company accounting oversight board (PCAOB) regulates public accounting firms

    ensures investors get all financial info
  • Reports Audit Committee
    under SOX, auditors must report to audit committee of client's board of directors
  • Conflicts of Interest
    firm can't audit company if one of client's top officers has work for that firm within prior year and was involved in company's audit
  • Consolidation in the Accounting Profession
    4 firms audit 98% of all US companies with revenues over $1 billion
  • audits
    source of liability for accountants
  • vouching
    auditor chooses transaction listed in company's books, checks backward for original supporting data
  • tracing
    auditor takes item of original data, tracks it forward, makes sure properly required through bookkeeping process
  • GAAP
    Generally accepted accounting principles

    Rules for preparing financial statements
  • GAAS
    Generally accepted auditing standards

    Rules for conducting audits
  • IFRS
    Proposed change

    International financial reporting standards
  • CAMs
    critical audit matters
  • opinions
    unqualified (best), qualified, adverse, disclaimer of opinion (worst)
  • engagement letter
    contract by which client hires an accountant
  • negligence
    accountant breaches duty by failing to exercise degree of skill/competence that normal accountant would

    violation of duty causes client harm
  • common law fraud
    makes false statement knows isn't true, client relies on it, reliance results in damage
  • breach of trust
    Failing to keep client info private
  • Fiduciary Relationship
    one party obligated to act in trustworthy fashion for benefit of other person and to put person’s interest first
  • Ultramares Doctrine
    accountants who fail to exercise due care are liable to third party if knew third party will see work product and will rely on work product for particular, known purpose
  • Foreseeable Doctrine 
    liable to third party if it was foreseeable that the third party would receive financial statements from the accountant’s client and the third party relied on these statements
  • Restatement Doctrine
    accountants who fail to exercise due care are liable to anyone else in the same class
  • Liability for Qualified Opinions
    less than clean opinion must be issued for right reasons
  • Securities Act of 1933
    §liable for any material misstatement or omission in the financial statement that they prepare for a registration statement
  • Due diligence
    investigation of a registration statement
  • Securities Exchange Act of 1934
    auditor who makes a false or misleading statement in a required filing is liable to any buyer or seller of the stock who had acted in reliance on the statement
  • Scienter
    action is done knowingly or recklessly with an intent to deceive, manipulate, or defraud
  • aiding and abetting
    SEC can sue those who aid/abet others in making untrue statements connecting with purchase/sale of security
  • whistleblowing
    auditors who suspect that a client has committed an illegal act must ensure that the client’s board of directors is notified
  • Joint and Several Liability
    all members of a group are liable. They can be sued as a group, or any of them can be sued individually for the full amount owning. But the plaintiff may not recover more than 100% of her damages
  • The Accountant – Client Relationship
    §An auditor or her family must not, for example, maintain a financial or business relationship with a client
  • Accountant-client privilege
    §Internal Revenue Service Restructuring and Reform Act which provides limited protection for confidential communications between accountants and clients
  • working papers
    accountants own the draft materials they are preparing for a client, but the client controls who sees them
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Summary - Class notes - business law

  • 1476655200 10/17/16

  • provides an incentive for persons to act reasonably in society and imposing penalties on persons who violate the laws
    criminal law
  • violation of a statute for which the government imposes a punishment
  • a collection of criminal statutes
    penal codes
  • statutes that provide for criminal violations and penalties; ex. environmental laws, security laws, and antitrust laws
    regulatory statutes
  • the most series type of crime
  • a crime that is less serious than a felony; ex. most of the time with property
  • a crime that is neither a felony nor misdemeanor and is usually punishable by a fine
  • a crime that requires the defendant to be guilty of committing a criminal act with criminal intent
    intent crime
  • "guilty act"-the actual performance of a criminal act
    actus reus
  • "evil intent"-state of mind to commit a prohibited act
    mens reus
  • a crime that requires that the perpetrator intended to achieve a specific result from his or her illegal act
    specific intent crime
  • a crime that requires that the perpetrator either knew or should have known that his or her actions would lead to harmful results
    general intent crime
  • a crime that imposes criminal liability without a finding of men reus
    nonintent crime
  • evidence of the substantial likelihood that a person either committed or is about to commit a crime
    probably cause
  • an arrest that is made without obtaining an arrest warrant
    warrantless arrest
  • charge of having committed a crime, based on the judgement of grand jury
  • the charge of having committed a crime based on the judgement of a judge
  • a hearing during which the accused is brought a court and is informed of the charges against him or her and asked to enter a plea
  • an agreement in which the accused admits to lesser crime than charged, lesser charge
    plea bargain agreement
  • a jury that cannot come to a unanimous decision about the defendant's guilt
    hung jury
  • the unlawful killing of a human being by another person without justification
  • the intentional unlawful killing of a human being by another person with premeditation, malice aforethought, and willful act
    first-degree murder
  • the intentional unlawful killing of a human being by another person that is not premeditated or planned in advance
    second-degree murder
  • the intentional unlawful killing of a human being by another person that is not premeditated or planned in advance and that is committed under circumstances that would cause a reasonable person to become emotionally disturbed
    voluntary manslaughter
  • the unintentional unlawful killing of a human being by another person that is caused from a reckless or negligent act
    involuntary manslaughter
  • the taking of personal property from another person by the use of fear or force
  • the taking of personal property from another's home, office, or commercial or other type of building
  • the taking of another's personal property other than from his or her person or building
  • a crime that involves knowingly receiving stolen property and intending to deprive the rightful owner of that property
    receiving stolen property
  • the willful or malicious burning of a building
  • crimes that are often committed by businesspeople
    white-collar crime
  • the fraudulent making or alteration of a written document that affects the legal liability of another person
  • the fraudulent conversion of property by a person to whom that property was entrusted
  • a crime in which one person gives another person money, property, favors, or anything else of value for a favor in return
  • a threat to expose something about another person unless that other person gives money or property
  • a crime that involves obtaining title to property through deception or trickery
    criminal fraud
  • a crime to engage in a money transaction involving property from an unlawful activity
    money laundering control act
  • a federal act that provides for both criminal and civil penalties for racketeering
  • a crime in which two or more persons enter into an agreement to commit a crime and an overt act is taken to further the crime
    criminal conspiracy
  • crime that is committed using computers, email, the internet, or other electronic means
  • protection granted by the Fourth Amendment for people to be free form unreasonable search and seizure by the government
    unreasonable search and seizure
  • a warrant issued by a court that authorizes the police to search a designated place for specified contraband, articles, items, or documents
    search warrant
  • a rule that says evidence obtained from an unreasonable search and seizure can generally be prohibited from introduction at a trial or an administrative proceeding against the person searched
    exclusionary rule
  • a wrong; intentional, unintentional(negligence), strict liability
  • a category of torts that requires that the defendant possessed the intent to do the act that caused the plaintiff's injuries
    intentional tort
  • the threat of immediate harm or offensive contact or any action that arouses reasonable apprehension of imminent harm
  • unauthorized and harmful or offensive direct or indirect physical contact with another person that causes injury
  • intentional confinement or restraint of another person without authority or justification and without that person's consnt
    false imprisonment
  • Which is not true about the United States criminal law system?
    a jury's vote to convict must be unanimous
  • Imprisonment is usually imposed to serve certain functions except
    allow victims a means and location to confront the criminal
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