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A Public Accounting Firm Takes Up a Contract to Perform

question 55

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A public accounting firm takes up a contract to perform an external audit for an oil manufacturing company. The firm, however, is already in a consulting contract with the oil company. Because of its prior association with the oil company and the hefty fee the oil company pays the firm, the firm manipulates the audit report. Which of the following laws is violated in this scenario?


Definitions:

State Courts

Courts established by the laws of each state in the U.S. that have jurisdiction over disputes and cases within their respective states.

Supremacy Clause

A clause in the U.S. Constitution declaring that federal laws are the supreme law of the land and take precedence over state laws.

State Law

Laws established by individual states in the United States, as opposed to federal laws which apply to the entire country.

Federal Question

A legal issue involving the interpretation of the U.S. Constitution, federal laws, treaties, or regulations, which gives federal courts jurisdiction.

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