CNA CNA Business Law and Ethics 2 — Questions and Answers
Question 1: The Foreign Corrupt Practices Act (FCPA) prohibits U.S. companies and individuals from:
- Hiring foreign nationals for domestic accounting roles
- Bribing foreign government officials to obtain or retain business (Correct answer)
- Reporting foreign income on U.S. tax returns
- Using offshore accounts for treasury management
Correct answer: Bribing foreign government officials to obtain or retain business
The FCPA makes it illegal for U.S. persons and companies to bribe foreign officials for business advantages, and requires accurate books and records.
Question 2: Under the AICPA Code of Professional Conduct, which principle requires CPAs to be straightforward and honest in all professional relationships?
- Due care
- Integrity (Correct answer)
- Objectivity
- Independence
Correct answer: Integrity
The integrity principle requires CPAs to be honest and candid, avoiding subordination of judgment or misleading representations in all professional dealings.
Question 3: A business tort that occurs when a competitor makes false statements of fact about a rival's products is known as:
- Fraudulent misrepresentation
- Trade libel (product disparagement) (Correct answer)
- Tortious interference
- Unjust enrichment
Correct answer: Trade libel (product disparagement)
Trade libel, or product disparagement, is a business tort involving false statements of fact about a competitor's goods or services that cause economic harm.
Question 4: Which legal doctrine holds employers responsible for torts committed by employees acting within the scope of their employment?
- Vicarious liability (Correct answer)
- Strict liability
- Contributory negligence
- Comparative fault
Correct answer: Vicarious liability
Vicarious liability (respondeat superior) makes employers legally responsible for wrongful acts committed by employees in the course of their work duties.
Question 5: In bankruptcy law, a Chapter 7 filing involves:
- Reorganization of debts under a repayment plan
- Liquidation of assets to pay creditors (Correct answer)
- Restructuring of municipal debt obligations
- Adjustment of debts for family farmers only
Correct answer: Liquidation of assets to pay creditors
Chapter 7 bankruptcy is a liquidation proceeding in which a trustee sells the debtor's non-exempt assets and distributes proceeds to creditors.
Question 6: Which principle in accounting ethics requires a CPA not to allow bias, conflicts of interest, or undue influence to override professional judgments?
- Confidentiality
- Professional competence
- Objectivity (Correct answer)
- Due care
Correct answer: Objectivity
Objectivity requires CPAs to remain impartial and free from conflicts of interest so their professional judgments are based solely on evidence and facts.
CNA CNA Business Law and Ethics 2
The Foreign Corrupt Practices Act (FCPA) prohibits U.S. companies and individuals from: