MAY 2013 – Page 5

AAA – Nov 2013 – L3 – SB – Q6 – Auditor’s Legal Liability

Discuss criminal charges against accountants, reasons auditors prefer out-of-court settlements, and the disadvantages of such settlements.

Question

Auditors’ liabilities may arise under common law and statute. Statutory liability may be civil or criminal. Professional accountants are increasingly guiding against incidences of litigation that may impact negatively on their work.

You are required to:

(a) Outline SIX ways through which accountants may be charged for criminal offenses. (6 Marks)

(b) Explain SIX reasons why auditors are willing to settle legal matters with their clients out of court. (6 Marks)

(c) State THREE disadvantages of an out-of-court settlement. (3 Marks)

(Total: 15 Marks)

Answer

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Tags: Auditor Liability, criminal offenses, legal considerations, Litigation, Out of Court Settlement, Professional Ethics
Level: Level 3

Topic: Auditor’s Legal Liability
Series: MAY 2013

AAA – Nov 2013 – L3 – AII – Q2 – Audit Evidence

Audit Evidence, Balance Confirmation, Reporting Dates, Discrepancy, Fraud

Question

A reported difference in a confirmation of balances by a debtor to a client due to different reporting date but not due to misstatement or fraud is known as………………….

Answer

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Tags: Audit evidence, Balance Confirmation, Discrepancy, Fraud, Reporting Dates
Level: Level 3

Topic: Audit evidence
Series: MAY 2013, NOV 2013

BL – May 2013 – L1 – SB – Q6C – Law of Trusts

Explain the reporting duty of a bank and stockbroker in cross-border transfers involving Dr. Aminu.

Question

Dr. Aminu recently transferred the sum of US$11,000 to his account in Business Bank Plc, Lagos, from his bank in the United States. He also informed his stockbroker of his intention to transfer his shares in some Nigerian companies listed on the New York Stock Exchange to his C.S.C.S. account with the stockbroker in Nigeria. The shares are valued at US$20,000.

You are required to:

Explain the reporting duty of Business Bank Plc and the stockbroker.

Answer

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Tags: Bank Transfers, Cross-Border Transactions, Nigerian Law, Reporting Duty
Level: Level 1

Topic: Law of Trusts
Series: MAY 2013

BL – May 2013 – L1 – SB – Q6B – Law of Trusts

Explain the duties of trustees regarding the disbursement of trust funds to beneficiaries.

Question

Biodun and Johanna are twins of twenty-one years of age. By the Will of their deceased father that came into effect ten years ago, the trustees were directed to invest a sum of N5 million and apply the income to the education of Biodun and Johanna. These beneficiaries have directed that the trustees pay the N5 million over to them.

You are required to:

Explain the duty of the trustees in relation to the directive of Biodun and Johanna.

Answer

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Tags: Disbursement, Trust Funds, Trustees
Level: Level 1

Topic: Law of Trusts
Series: MAY 2013

BL – May 2013 – L1 – SB – Q6A – Law Relating to Banking

State three reasons a creditor may present a bankruptcy petition against a debtor.

Question

Explain THREE reasons for which a creditor shall be entitled to present a bankruptcy petition against a debtor.

Answer

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Tags: Bankruptcy, Creditor’s Petition, Liquidated Debt
Level: Level 1

Topic: Law Relating to Banking
Series: MAY 2013

BL – May 2013 – L1 – SB – Q5D – Company Law

Explain the procedure to fill a casual vacancy in the office of the company’s auditor.

Question

Chief Ogongo, the Chairman of the recently incorporated Fortune Finance Limited,
has requested your advice on the appointment of auditors of the company,
particularly on the following issues:

What should be done where there is a casual vacancy in the offices of the auditors?

Answer

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Tags: Auditor, Casual Vacancy, Company Law
Level: Level 1

Topic: Company Law
Series: MAY 2013

BL – May 2013 – L1 – SB – Q5C – Company Law

Discuss what happens if no auditors are appointed at the AGM.

Question

Chief Ogongo, the Chairman of the recently incorporated Fortune Finance Limited,
has requested your advice on the appointment of auditors of the company,
particularly on the following issues:

What happens if, at an Annual General Meeting, no auditors were appointed or re-appointed?

Answer

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Tags: Company Law, Failure to Appoint Auditors
Level: Level 1

Topic: Company Law
Series: MAY 2013

BL – May 2013 – L1 – SB – Q5B – Company Law

Explain how existing auditors can be re-appointed without objection at the AGM.

Question

Chief Ogongo, the Chairman of the recently incorporated Fortune Finance Limited,
has requested your advice on the appointment of auditors of the company,
particularly on the following issues:

How would the existing auditors of the company, desirous of re-election at the next Annual General Meeting, and without objection, be re-appointed?

Answer

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Tags: Company Law, Re-Appointment of Auditors
Level: Level 1

Topic: Company Law
Series: MAY 2013

BL – May 2013 – L1 – SB – Q5A – Company Law

Explain how the first auditors of a company are appointed.

Question

Chief Ogongo, the Chairman of the recently incorporated Fortune Finance Limited,
has requested your advice on the appointment of auditors of the company,
particularly on the following issues:

How will the first auditors of the company be appointed?

Answer

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Tags: Appointment of Auditors, Company Law, First Auditors
Level: Level 1

Topic: Company Law
Series: MAY 2013

BL – May 2013 – L1 – SB – Q4B – Company Law

Explain two conditions Harddin Limited must fulfill to invite public subscription.

Question

Harddin Limited has informed you of its intention to invite the public to acquire its securities and to deposit money with it for a fixed period payable at call.

You are required to:

Explain TWO conditions that Harddin Limited must fulfill to achieve its proposed plan.

Answer

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Tags: Company Conversion, Investment and Securities Act, Public Subscription
Level: Level 1

Topic: Company Law
Series: MAY 2013

BL – May 2013 – L1 – SA – Q16 – Company Law

This question tests the understanding of the time frame within which a company must notify a transferee of refusal to register shares.

Question

Within how many months must a company that refuses to register a transfer of any shares send the notice of the refusal to the transferee?

A. One
B. Two
C. Three
D. Four
E. Five

Answer

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Tags: Company Law, Notice of Refusal, Share Transfer
Level: Level 1

Topic: Company Law
Series: MAY 2013

BL – May 2013 – L1 – SA – Q15 – Company Law

This question tests the maximum number of days for which a proposed company name can be reserved by the Corporate Affairs Commission.

Question

The maximum number of days for which the name of a company that is proposed to be registered shall be reserved by the Corporate Affairs Commission is:

A. 30
B. 45
C. 60
D. 75
E. 90

Answer

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Tags: Company Law, Corporate Affairs Commission, Name Reservation
Level: Level 1

Topic: Company Law
Series: MAY 2013

BL – May 2013 – L1 – SA – Q14 – Agency Law

This question tests knowledge of the principles not applicable to life assurance.

Question

Which of the following principles is NOT applicable to life assurance?

A. Insurable interest
B. Assignment
C. Utmost good faith
D. No premium no cover
E. Subrogation

Answer

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Tags: Insurance Law, Life Assurance, Principles of Insurance
Level: Level 1

Topic: Agency Law
Series: MAY 2013

BL – May 2013 – L1 – SA – Q13 – Law of Contract

This question tests the understanding of a statement made with a request for verification in contract law.

Question

A statement made by a party to a contract but with a request to the other party to verify the truth of the statement is:

A. Binding on the other party
B. A term of the contract
C. Not a term of the contract
D. A condition of the contract
E. A misrepresentation

Answer

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Tags: Contract Law, Misrepresentation, Verification
Level: Level 1

Topic: Law of Contract
Series: MAY 2013

BL – May 2013 – L1 – SA – Q12 – Law Relating to Banking

This question tests the knowledge of which court has exclusive jurisdiction on matters pertaining to the taxation of limited liability companies.

Question

Which court has exclusive jurisdiction on matters pertaining to the taxation of limited liability companies?

A. High Court of a State
B. High Court of the Federal Capital Territory
C. Federal High Court
D. Court of Appeal
E. Supreme Court

Answer

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Tags: Corporate Tax Law, Jurisdiction, Taxation
Level: Level 1

Topic: Law Relating to Banking
Series: MAY 2013

BL – May 2013 – L1 – SA – Q11 – Law Relating to Banking

This question tests the knowledge of the official responsible for administering a debtor's estate in bankruptcy.

Question

The person charged with the duty of administering a debtor’s estate in a bankruptcy proceeding is known as the:

A. Liquidator
B. Official Receiver
C. Registrar of the Supreme Court
D. Auctioneer
E. Executor

Answer

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Tags: Bankruptcy, Insolvency, Official Receiver
Level: Level 1

Topic: Law Relating to Banking
Series: MAY 2013

BL – May 2013 – L1 – SA – Q10 – Law Relating to Banking

This question tests the number of days required for a financial institution to report large transfers to the EFCC.

Question

How many days are required for a financial institution to report to the Economic and Financial Crimes Commission the transfer of funds in excess of N10 million by an individual?

A. 5
B. 6
C. 7
D. 10
E. 30

Answer

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Tags: Banking Law, EFCC, Financial Transactions
Level: Level 1

Topic: Law Relating to Banking
Series: MAY 2013

BL – May 2013 – L1 – SA – Q9 – Partnership Law

This question tests knowledge of the applicability of the English Partnership Act (1890) in Nigerian states.

Question

The English Partnership Act (1890) is still applicable in:

A. Lagos State
B. Oyo State
C. Osun State
D. Ondo State
E. Sokoto State

Answer

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Tags: English Law, Partnership Act, Partnership Law
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: MAY 2013

BL – May 2013 – L1 – SA – Q8 – Agency Law

This question tests the understanding of the concept of ratification by a principal in an agency relationship.

Question

Any act or statement which clearly shows the intention of the principal to adopt the action taken on his behalf by the agent is known as:

A. Ratification
B. Estoppel
C. Revocation
D. Consideration
E. Novation

Answer

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Tags: Agency, Principal-Agent Relationship, Ratification
Level: Level 1

Topic: Agency Law
Series: MAY 2013

BL – May 2013 – L1 – SA – Q7 – Law of Contract

This question tests the knowledge of agreements obtained under duress.

Question

An agreement obtained under a threat to seize goods would be set aside by the court for:

A. Mistake
B. Misrepresentation
C. Undue influence
D. Breach of influence
E. Duress

Answer

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Tags: Coercion, Contract Law, Duress
Level: Level 1

Topic: Law of Contract
Series: MAY 2013

Series: MAY 2013

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AAA – Nov 2013 – L3 – SB – Q6 – Auditor’s Legal Liability

Discuss criminal charges against accountants, reasons auditors prefer out-of-court settlements, and the disadvantages of such settlements.

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AAA – Nov 2013 – L3 – AII – Q2 – Audit Evidence

Audit Evidence, Balance Confirmation, Reporting Dates, Discrepancy, Fraud

You're reporting an error for "AAA – Nov 2013 – L3 – AII – Q2 – Audit Evidence"

BL – May 2013 – L1 – SB – Q6C – Law of Trusts

Explain the reporting duty of a bank and stockbroker in cross-border transfers involving Dr. Aminu.

You're reporting an error for "BL – May 2013 – L1 – SB – Q6C – Law of Trusts"

BL – May 2013 – L1 – SB – Q6B – Law of Trusts

Explain the duties of trustees regarding the disbursement of trust funds to beneficiaries.

You're reporting an error for "BL – May 2013 – L1 – SB – Q6B – Law of Trusts"

BL – May 2013 – L1 – SB – Q6A – Law Relating to Banking

State three reasons a creditor may present a bankruptcy petition against a debtor.

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BL – May 2013 – L1 – SB – Q5D – Company Law

Explain the procedure to fill a casual vacancy in the office of the company’s auditor.

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BL – May 2013 – L1 – SB – Q5C – Company Law

Discuss what happens if no auditors are appointed at the AGM.

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BL – May 2013 – L1 – SB – Q5B – Company Law

Explain how existing auditors can be re-appointed without objection at the AGM.

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BL – May 2013 – L1 – SB – Q5A – Company Law

Explain how the first auditors of a company are appointed.

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BL – May 2013 – L1 – SB – Q4B – Company Law

Explain two conditions Harddin Limited must fulfill to invite public subscription.

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BL – May 2013 – L1 – SA – Q16 – Company Law

This question tests the understanding of the time frame within which a company must notify a transferee of refusal to register shares.

You're reporting an error for "BL – May 2013 – L1 – SA – Q16 – Company Law"

BL – May 2013 – L1 – SA – Q15 – Company Law

This question tests the maximum number of days for which a proposed company name can be reserved by the Corporate Affairs Commission.

You're reporting an error for "BL – May 2013 – L1 – SA – Q15 – Company Law"

BL – May 2013 – L1 – SA – Q14 – Agency Law

This question tests knowledge of the principles not applicable to life assurance.

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BL – May 2013 – L1 – SA – Q13 – Law of Contract

This question tests the understanding of a statement made with a request for verification in contract law.

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BL – May 2013 – L1 – SA – Q12 – Law Relating to Banking

This question tests the knowledge of which court has exclusive jurisdiction on matters pertaining to the taxation of limited liability companies.

You're reporting an error for "BL – May 2013 – L1 – SA – Q12 – Law Relating to Banking"

BL – May 2013 – L1 – SA – Q11 – Law Relating to Banking

This question tests the knowledge of the official responsible for administering a debtor's estate in bankruptcy.

You're reporting an error for "BL – May 2013 – L1 – SA – Q11 – Law Relating to Banking"

BL – May 2013 – L1 – SA – Q10 – Law Relating to Banking

This question tests the number of days required for a financial institution to report large transfers to the EFCC.

You're reporting an error for "BL – May 2013 – L1 – SA – Q10 – Law Relating to Banking"

BL – May 2013 – L1 – SA – Q9 – Partnership Law

This question tests knowledge of the applicability of the English Partnership Act (1890) in Nigerian states.

You're reporting an error for "BL – May 2013 – L1 – SA – Q9 – Partnership Law"

BL – May 2013 – L1 – SA – Q8 – Agency Law

This question tests the understanding of the concept of ratification by a principal in an agency relationship.

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BL – May 2013 – L1 – SA – Q7 – Law of Contract

This question tests the knowledge of agreements obtained under duress.

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