It is comprised of 30 Short Answer questions and 5 Bonus Questions. Follow the directions on each question.

Any references to the Securities Exchange Act of 1933 and the Securities Exchange Act of 1934 are hereafter referred to as the “33 Act” and the “34 Act,” respectively.

Any references to the Uniform Commercial Code will hereafter appear as the “UCC.”

This Exam is worth 50 points toward your final grade.

Each Short Answer question is worth three points. A Bonus Question is worth 10 separate points. You can elect to answer a Bonus Question or to not do so. If you do not answer it, there will be no penalty and your grade will be computed based on the points that you accumulate from your responses to the questions in the main part of the Exam. If you respond to the Bonus Question and get points for your response, those points will be added to your raw point total from your responses to the questions in the regular part of the Exam.

The total possible points on the main part of the Exam are 90. Therefore, if you get full credit for the main part of the Exam and full credit for a Bonus Question, you will get 100 points computed as a percentage of 90 points which percent will be applied to the 50 points toward your final grade.

While there are 5 Bonus Questions, if you respond to a Bonus Question, respond to only one. Do not respond to more than one Bonus Question.

This Exam is in word format. Therefore, put your responses on the Exam and e-mail it directly back to me with your responses by no later than Monday, 30 November 2020 at noon, Central time.

It is my strong advice to not wait until close to when your submissions are due to start working on this Exam. This is not an Exam that can, for the most part, be done by simply relying on your present memory. It is anticipated that you will need to refresh your memory as well as go to the text in order to adequately answer a significant number of the questions.

Fill in the identifying information above and note the Certificate below.

Certification

I hereby certify and affirm that, by submitting these responses, I have neither given nor received any aid of any type on this Exam to or from any of my classmates, that the work evidenced in the responses below is the result of my own work, and that, other than specifically noted and fully identified, my submissions are not from any Internet sources.

I further certify that, if I used any internet sources, I have fully cited those sources, attributed those sources to the portion(s) of my submissions to which they relate, and fully described those sources, to include the author(s), the sources, and the relevant pages in those sources.

Short Answer

1.

The conflating of the Constitutional functions of the Legislature, the Executive, and the Judicial powers/functions of the three separate branches of our federal government into federal administrative agencies puts in peril what central doctrine of our Constitutional system and structure?

2.

The Citizens United decision from the Supreme Court stands for the proposition that Federal Election Commission rules banning corporations from using their corporate funds for what political purpose are unconstitutional under the First Amendment?

3.

During a federal prosecutor’s determination about whether to charge an organization criminally, one thing that the federal prosecutor will consider is whether the organization has a compliance and ethics program. What is the term that describes the required level of substantive content and quality of such a program that are addressed in Chapter 8 of the Organizational Sentencing Guidelines.

4.

Before she left the DOJ, then Deputy Attorney General Sally Yates, wrote a memorandum adding what additional criteria to the determination of whether an organization has been “cooperative” in connection with DOJ charging decisions?

5.

In the prosecution of a corporation for a crime involving a knowing level of mens rea, some courts are willing to take the different amounts of knowledge held by multiple employees and combine all of that knowledge to find the required level of knowledge for the crime. What is the name of that doctrine?

6.

What is the aspect of a Limited Partnership that differentiates that form of business organization from other partnerships and that makes such a partnership a security under the 33 Act?

7.

Under the 33 Act, who may be qualitied to file a registration statement that covers an unlimited amount of securities that may be issued within three years of the effective date of the registration?

8.

Under the 34 Act, if there has been insider trading, who has standing to bring a civil action against the inside trader?

9.

Under the 34 Act, while a plaintiff’s burden of production in a false or misleading statement case is to show reliance by the plaintiff, an alternative theory that may substitute for reliance is:­­­­­­­_____________.

10.

If a permissible defense to a 33 Act misstatement claim is that the defendant should not have been expected to have known of the misstatement, to what “state of mind” that we addressed in the Model Penal Code is that equivalent?

11.

What is the term that is frequently used in Securities Litigation to mean the state of mind and/or mens rea of culpability?

12.

Under Section 11 of the 33 Act, for what will an accountant be liable if there is a misstatement of material fact in a registration statement?

13.

What are the two elements of an accountant’s criminal liability for aiding and abetting liability under the 34 Act’s antifraud provisions?

14.

Under the 34 Act, “willfulness” is sometimes considered equivalent to what state of mind that we studied in the Model Penal Code

15.

Under state law the majority rule is that an accountant is liable to foreseen third parties for negligence. Under that majority rule, foreseen third parties are those to whom the accountant intends to supply the information or knows that the client will supply it. However, a minority rule allows liability for negligence to extend to what kind of third parties?

16.

What is the scope of personal jurisdiction of Bankruptcy courts?

17.

In a bankruptcy proceeding when a Trustee is appointed by the Bankruptcy Court, the Board of Directors retains the right and ability to waive the Attorney-Client Privilege. True/False? Explain.

18.

If during a corporation’s internal investigation, the lead attorney conducting the investigation asks you to assist her, communications between you and the attorney “will or will not” be protected by the Attorney-Client Privilege? Explain.

19.

If you concluded in question 18 above that the Attorney-Client Privilege would apply to such communications, it would also cover any documents that you would prepare as part of your work product. True/False? Explain.

20.

An agency relationship itself is not a pure contractual relationship. Therefore, what crucial element of a contract under Common Law that must exist in enforceable contracts is not necessary in an agency relationship?

21.

In order for the doctrine of Estoppel to apply to an alleged agency relationship in a transaction, what is the state of mind that a principal must have with respect to the conduct of the purported agent?

22.

If the doctrine of Estoppel is applied in an agency setting, a finding of liability of the purported principal must include a finding that actual agency, therefore, existed. True/False? Explain.

23.

While a principal is not normally held vicariously liable for the torts of an independent contractor, there is a theory that can be used to make the principal liable. What is that theory?

24.

What is the legal doctrine on which the tort liability of a principal for the acts or omissions of an agent is based?

25.

In order for criminal liability to be attributed to corporation for a criminal act committed by an agent of the corporation, the doctrine referred to in question 24 above, requires two evidentiary findings. What are they?

26.

Under the UCC, leaving one or more terms of a contract open does not generally prevent the formation of an enforceable contract. However, even under the UCC there is one term that, if left open, might in fact prevent the formation of an enforceable contract. What is that term?

27.

Under the UCC, if the seller of goods has delivered nonconforming goods i.e. has not complied with the Perfect Tender Rule, what is the name of the right that the seller has to conform his tender if the seller can deliver conforming goods within the time allowed by the contract?

28.

While, under the UCC, an implied warranty of merchantability can be disclaimed, one type of attempted disclaimer will be considered unconscionable and not enforced by the courts. What is that type of attempted disclaimer?

29.

Under the UCC, a buyer who rightfully rejects nonconforming goods or justifiably revokes acceptance has the right to purchase substitute goods in the marketplace. What is that right called?

30.

While the right referred to in question 29 in the UCC is not mandatory, what similar ability is required as an obligation and, therefore, is mandatory under the Common Law of Contracts?

BONUS QUESTIONS

Bonus Question One

Of the psychological impediments to moral decision making and moral behavior that we discussed during our first class of this course, to which ones do you think accountants might be the most susceptible and why?

Bonus Question Two

If you are an in-house Accountant for your corporation and the corporation’s Compliance and Ethics Officer asks you to help design the ethics component of your corporation’s Compliance and Ethics Program, what would be a concept that would be a guiding paradigm for you? Explain.

Bonus Question Three.

If this country moves toward Socialism, Marxism, and/or Communism and thereby rejects the Founding Fathers’ concept that, before governments existed, we as human beings were endowed with certain unalienable natural rights, that those natural rights came from God (see the Declaration of Independence), and that government’s only role is to protect those natural rights, what will inevitably be the source of rights that we will have as citizens of the U.S.? Explain your perspective.

Bonus Question Four

With respect to your interviewing for accounting positions in a corporation or with an accounting or auditing firm, is the concept of “moral space” relevant to you? Explain your perspectives.

Bonus Question Five

Explain how the philosophy of Emanuel Kant is relevant to any organizational culture and the way that a corporation does business.