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If the agency relationship is undisclosed, the agent is liable to the third party if they fail to perform.
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- When an employee is in a position to detect and hide fraudulent activity, incompatible obligations exist. False or True?Indicate which of the following claims is true and which is untrue. Distinguishing responsibility for a transaction between two or more persons or departments will not prevent someone from producing a bogus invoice and paying themself.Which type of agent is not liable for a breach of contract by his principal: a. undisclosed agent b. partially disclosed agent c. fully disclosed agent d. all of the above
- Which of the following is true? B. The agent is expected to carry out an agency although its execution would manifestly result in loss or damage to the principal. D. Agency is presumed to be for a compensation, unless there is proof to the contrary. A. The contract of agency is extinguished by the insanity of the agent but not of the principal. C. Two persons authorizing an agent to sell a property on their behalf are liable jointly to the agent.Explain when exculpatory agreements, agreements involving the commitment of a tort, and agreements involving public officials will be held to be illegal.The root cause of agency problems is conflicts of interest. Select one: True False
- If either party fails to perform their contractual obligations according to the contract terms, it will usually result in a breach of contract. The scope and nature of an auditor's contractual obligation to a client ordinarily is established in the: Select one: a. Corporations Act 2001. b. Management letter. c. Client’s constitution. d. Engagement letter.Incompatible duties exist when an employee is in a position tlo penetrate and conceal errors of fraud. True or FalseNon-compliance does not include: a. Professional misconduct b. Personal misconduct c. Intentional errors and omissions by entity d. Unintentional errors and omissions by entity
- Culpa aquiliana as distinguished from culpa contractual: Proof of due diligence in the selection and supervision of employees is not considered a defense. Proof of the contract and its breach is sufficient to warrant recovery. The negligence of the defendant is only an incident in the performance of the obligation. The source of liability is the negligent act of the person causing damage to another.The mere existence of a related party should be disclosed despite of not having any transactions with them. TRUE OR FALSEWhat types of actions may an auditor be liable to a client under common law? Why would the clients prefer to sue the auditor for tort action rather than a breach of contract?
