Chapter 10, Problem 4QAP

Innovative Marketing, Inc. (IMI), sold “scareware”—computer security software. IMI’s Internet ads redirected consumers to sites where they were told that a scan of their computers had detected dangerous files—viruses, spyware, and “illegal” pornography. In fact, no scans were conducted. Kristy Ross, an IMI co-founder and vice president, reviewed and edited the ads, and was aware of the many com- plaints that consumers had made about them. An individual can be held liable under the Federal Trade Commission Act’s prohibition of deceptive acts or practices if the person (1) participated directly in the deceptive practices or had the authority to control them and (2) had or should have had knowledge of them. Were IMI’s ads deceptive? If so, can Ross be held liable? Explain..

Do you think it would be ethical for a CPA to have someone else do for her that which she is prohibited from doing by the AICPA Code of Professional Conduct? Why or why not? Do you think a CPA can justify allowing the unethical behavior of a supervisor by claiming, “It’s not my job to police the behavior of others?”

A staff accountant at a company refuses to answer questions from the IRS during an audit, invoking his 5th Amendment right against self-incrimination. If the IRS offers him immunity from criminal prosecution, he must be willing to answer under oath and can no longer invoke the 5th Amendment. Group of answer choices True False

On March 2015, Agency A is taking legal action against its competitor for patent infringement relating to a patent that had been granted to the agency on one of its products. The outcome of the case is uncertain.  However, it is probable that the court will order the competitor to pay damages to the entity. Use facts given in No. 1, but assumes that on June 2015 the Chief Legal Counsel of Agency A informs the management that it is now virtually certain that the court will order the competitor to pay damages to the entity.  State whether a contingent liability or contingent asset exists. Explain your answers by stating the criteria of your answers below.

Cartage Inc. agrees to pick up two truckloads of housewares for Discount Corporation and store the contents to be delivered later. After Cartage unloads the goods at its storage facility, some of them disappear from the loading dock. A court will presume that   a.  the goods were stolen through no fault of Cartage.     b.  the warehouse is in a high-crime area.     c.  Cartage was negligent.     d.  Discount was negligent

The exclusionary rule: A. Prohibits a party from testifying about the contents of a document without producing the document itself. B. Refers to the warnings advising suspects that they have the right not to answer questions and the right to legal counsel during an investigation. C. Provides that, if the government violates an individual’s constitutional rights during an investigation, if cannot prosecute the person whose rights were violated. D. Provides that, if evidence is unconstitutionally seized, that evidence cannot be used in a criminal prosecution against the person whose rights were violated.