BUSINESS LAW
TEST BANKS
,TABLE OF CONTENTS
• The Demand for Audit and Other Assurance Services
• The CPA Profession
• Audit Reports
• Professional Ethics
• Legal Liability
• Audit Responsibilities and Objectives
• Audit Evidence
• Audit Planning and Materiality
• Assessing the Risk of Material Misstatement
• Assessing and Responding to Fraud Risks
• Internal Control and Coso Framework
• Assessing Control Risk and Reporting on Internal Controls
• Overall Audit Strategy and Audit Program
• Audit of the Sales and Collection Cycle: Tests of Controls and Substantive
Tests of Transactions
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,• Audit Sampling for Tests of Controls and Substantive Tests of Transactions
• Completing the Tests in the Sales and Collection Cycle: Accounts Receivable
• Audit Sampling for Tests of Details of Balances
• Audit of the Acquisition and Payment Cycle: Tests of Controls, Substantive
Tests of Transactions, and Accounts Payable
• Completing the Tests in the Acquisition and Payment Cycle: Verification of
Selected Accounts
• Audit of the Payroll and Personnel Cycle
• Audit of the Inventory and Warehousing Cycle
• Audit of the Capital Acquisition and Repayment Cycle
• Audit of Cash and Financial Instruments
• Completing the Audit
• Other Assurance Services
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, Business Law in Canada, 12e (Yates/Bereznicki-Korol/Clarke)
Chapter 1 Managing Your Legal Affairs
1) In the context of a sophisticated client, "sophisticated" can best be defined as
A) complicated, self-reliant, and cosmopolitan.
B) refined and cultured.
C) simple and naïve.
D) confident, knowledgeable, and up to date.
E) aggressive, dynamic, and forceful.
Answer: D
Diff: 1 Type: MC Page Ref: 2
Topic: Ch. 1 - Becoming a Sophisticated Client
Skill: Recall
Objective: Chapter 1: 1. Explain the meaning of "sophisticated client."
Bloom's Taxonomy: Knowledge
2) Which of the following best describes the likelihood of a student becoming involved in a
situation necessitating legal advice?
A) A student, or someone close to a student, sometimes becomes involved in such a situation.
B) A student, or someone close to the student, will always become involved in such a situation.
C) Because students are not business people, they never become involved in such situations.
D) Because students cannot be sophisticated, they will often become involved in such situations.
E) Legal advice is not available to students.
Answer: A
Diff: 1 Type: MC Page Ref: 3
Topic: Ch. 1 - "I Think I Need Legal Advice..."
Skill: Applied
Objective: Chapter 1: 1. Explain the meaning of "sophisticated client."
Bloom's Taxonomy: Knowledge
3) Becoming a sophisticated client will
A) ensure that a business person never needs a lawyer.
B) help a business person manage her legal affairs more efficiently and effectively.
C) result in a business person developing a bias against lawyers.
D) relieve a business person from having to conduct legal research.
E) protect a business person from needing legal advice.
Answer: B
Diff: 2 Type: MC Page Ref: 3
Topic: Ch. 1 - "I Think I Need Legal Advice..."
Skill: Applied
Objective: Chapter 1: 1. Explain the meaning of "sophisticated client."
Bloom's Taxonomy: Knowledge
◻4) Having a good lawyer on your team is
Downloaded by Collins Mwaniki ()
TEST BANKS
,TABLE OF CONTENTS
• The Demand for Audit and Other Assurance Services
• The CPA Profession
• Audit Reports
• Professional Ethics
• Legal Liability
• Audit Responsibilities and Objectives
• Audit Evidence
• Audit Planning and Materiality
• Assessing the Risk of Material Misstatement
• Assessing and Responding to Fraud Risks
• Internal Control and Coso Framework
• Assessing Control Risk and Reporting on Internal Controls
• Overall Audit Strategy and Audit Program
• Audit of the Sales and Collection Cycle: Tests of Controls and Substantive
Tests of Transactions
Downloaded by Collins Mwaniki ()
,• Audit Sampling for Tests of Controls and Substantive Tests of Transactions
• Completing the Tests in the Sales and Collection Cycle: Accounts Receivable
• Audit Sampling for Tests of Details of Balances
• Audit of the Acquisition and Payment Cycle: Tests of Controls, Substantive
Tests of Transactions, and Accounts Payable
• Completing the Tests in the Acquisition and Payment Cycle: Verification of
Selected Accounts
• Audit of the Payroll and Personnel Cycle
• Audit of the Inventory and Warehousing Cycle
• Audit of the Capital Acquisition and Repayment Cycle
• Audit of Cash and Financial Instruments
• Completing the Audit
• Other Assurance Services
Downloaded by Collins Mwaniki ()
, Business Law in Canada, 12e (Yates/Bereznicki-Korol/Clarke)
Chapter 1 Managing Your Legal Affairs
1) In the context of a sophisticated client, "sophisticated" can best be defined as
A) complicated, self-reliant, and cosmopolitan.
B) refined and cultured.
C) simple and naïve.
D) confident, knowledgeable, and up to date.
E) aggressive, dynamic, and forceful.
Answer: D
Diff: 1 Type: MC Page Ref: 2
Topic: Ch. 1 - Becoming a Sophisticated Client
Skill: Recall
Objective: Chapter 1: 1. Explain the meaning of "sophisticated client."
Bloom's Taxonomy: Knowledge
2) Which of the following best describes the likelihood of a student becoming involved in a
situation necessitating legal advice?
A) A student, or someone close to a student, sometimes becomes involved in such a situation.
B) A student, or someone close to the student, will always become involved in such a situation.
C) Because students are not business people, they never become involved in such situations.
D) Because students cannot be sophisticated, they will often become involved in such situations.
E) Legal advice is not available to students.
Answer: A
Diff: 1 Type: MC Page Ref: 3
Topic: Ch. 1 - "I Think I Need Legal Advice..."
Skill: Applied
Objective: Chapter 1: 1. Explain the meaning of "sophisticated client."
Bloom's Taxonomy: Knowledge
3) Becoming a sophisticated client will
A) ensure that a business person never needs a lawyer.
B) help a business person manage her legal affairs more efficiently and effectively.
C) result in a business person developing a bias against lawyers.
D) relieve a business person from having to conduct legal research.
E) protect a business person from needing legal advice.
Answer: B
Diff: 2 Type: MC Page Ref: 3
Topic: Ch. 1 - "I Think I Need Legal Advice..."
Skill: Applied
Objective: Chapter 1: 1. Explain the meaning of "sophisticated client."
Bloom's Taxonomy: Knowledge
◻4) Having a good lawyer on your team is
Downloaded by Collins Mwaniki ()
