The Legal Environment of Business Text and Cases 9th Edition by Cross – Test Bank

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The Legal Environment of Business Text and Cases 9th Edition by Cross – Test Bank

Chapter 6

 

 

Administrative Agencies

 

 

 

 

N.B.:  TYPE indicates that a question is new, modified, or unchanged, as follows.

 

N      A question new to this edition of the Test Bank.

+       A question modified from the previous edition of the Test Bank.

=       A question included in the previous edition of the Test Bank.

 

 

true/false questions

 

  1. Like statutory law, administrative law is created by legislatures.

 

answer:     F                               PAGES:   Section 1                TYPE:       N

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. Administrative agencies at various levels of government work together and share the responsibility of enforcing particular regulations.

 

answer:     t                               PAGES:   Section 1                TYPE:       N

BUSPROG: Analytic                          AICPA: BB-Legal

 

  1. Business has little incentive to try to influence the regulatory environment through lobbying.

 

answer:     F                               PAGES:   Section 2                TYPE:       N

BUSPROG: Analytic                                AICPA: BB-Legal

 

 

 

  1. Federal administrative agencies can exercise only those powers that a state legislature has delegated to them in enabling legislation.

 

answer:     F                               PAGES:   Section 2                TYPE:       N

BUSPROG: Analytic                                AICPA: BB-Legal

 

  1. Legislative rules simply declare policy and do not affect legal rights or obligations.

 

answer:     F                               PAGES:   Section 2                TYPE:       +

BUSPROG: Analytic                                AICPA: BB-Legal

 

  1. A party seeking court review of an administrative action must first exhaust all of his or her administrative remedies before seeking court review.

 

answer:     T                               PAGES:   Section 2                TYPE:       =

BUSPROG: Analytic                                AICPA: BB-Legal

 

  1. An administrative rule may be arbitrary and capricious if the agency failed to provide a rational explanation for its decision.

 

answer:     T                               PAGES:   Section 3                TYPE:       N

BUSPROG: Analytic                                AICPA: BB-Legal

 

  1. All federal agencies must follow specific procedural requirements when fulfilling their basic functions.

 

answer:     T                               PAGES:   Section 3                TYPE:       N

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. Unlike statutes, administrative regulations do not have a binding effect.

 

answer:     F                               PAGES:   Section 3                TYPE:       N

BUSPROG: Analytic                                AICPA: BB-Legal

 

  1. Anyone can submit comments on a proposed administrative rule.

 

answer:     T                               PAGES:   Section 3                TYPE:       +

BUSPROG: Analytic                                AICPA: BB-Legal

 

  1. A party can be directly prosecuted for violating an administrative agency’s interpretive rule or guidance document.

 

answer:     F                               PAGES:   Section 3                TYPE:       N

BUSPROG: Analytic                                AICPA: BB-Legal

 

  1. When the meaning of a statute’s language is unclear and an agency interprets it, a court need not follow the interpretation even if it is reasonable.

 

answer:     F                               PAGES:   Section 4                TYPE:       +

BUSPROG: Analytic                                AICPA: BB-Legal

 

  1. Few agency rules require considerable compliance reporting from regulated entities.

 

answer:     F                               PAGES:   Section 5                TYPE:       N

BUSPROG: Analytic                                AICPA: BB-Legal

 

  1. If a business firm refuses to comply with an agency’s request to inspect facilities or business records, the agency must defer to the refusal.

 

answer:     F                               PAGES:   Section 5                TYPE:       =

BUSPROG: Analytic                                AICPA: BB-Critical Thinking

 

  1. Warrants are required to conduct administrative searches in all highly regulated industries.

 

answer:     F                               PAGES:   Section 5                TYPE:       N

BUSPROG: Analytic                                AICPA: BB-Legal

 

  1. Administrative agencies generally have no discretion over the type of hearing procedures that they use.

 

answer:     F                               PAGES:   Section 5                TYPE:       +

BUSPROG: Analytic                                AICPA: BB-Legal

 

  1. There are no significant differences between a trial and an administrative hearing.

 

answer:     F                               PAGES:   Section 5                TYPE:       N

BUSPROG: Analytic                                AICPA: BB-Legal

 

  1. All federal government agencies must make their records available electronically on the Internet and in other electronic formats.

 

answer:     t                               PAGES:   Section 6                TYPE:       +

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. A federal administrative agency must alert small businesses—through advertising in trade journals, for example—about forthcoming regulations.

 

answer:     T                               PAGES:   Section 6                TYPE:       N

BUSPROG: Analytic                                AICPA: BB-Legal

 

  1. Federal agencies must consider ways to reduce the economic impact of new regulations on small businesses.

 

answer:     T                               PAGES:   Section 6                TYPE:       =

BUSPROG: Analytic                                AICPA: BB-Legal

 

 

multiple choice questions

 

  1. Therapeutic Pharmaceutical Company is subject to regulations issued by the Food and Drug Administration, which is a federal agency. These regulations are part of the body of

 

  1. administrative law.
  2. legislative law.
  3. executive law.
  4. statutory law.

 

ANSWER:     A                              PAGES:   Section 1                TYPE:       N

BUSPROG: Reflective                             AICPA: BB-Legal

 

 

 

  1. State and federal transportation agencies may issue regulations that conflict. When a state regulation conflicts with a federal regulation

 

  1. the federal regulation takes precedence.
  2. the state regulation takes precedence.
  3. the regulations are mutually void.
  4. the regulations are of equal effect.

 

ANSWER:     A                              PAGES:   Section 1                TYPE:       N

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. Information Security Inc. pays income and other taxes collected by the Internal Revenue Service (IRS). Like other federal administrative agencies, the IRS was created by

 

  1. Congress, through enabling legislation.
  2. the courts, through the adjudicatory process.
  3. the U.S. Constitution, in Article I, Section 8.
  4. the president, through an executive order.

 

ANSWER:     A                              PAGES:   Section 2                TYPE:       +

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. Persons who favor the creation of a federal biotech agency to regu­late the production of genetically modified agricultural and animal products should con­cen­trate their lobbying ef­forts on

 

  1. Congress.
  2. federal administrative agencies that oversee such products.
  3. the United States Supreme Court.
  4. the president of the United States.

 

answer:     a                              PAGES:   Section 2                TYPE:       =

BUSPROG: Reflective                             AICPA: BB-Legal

 

 

 

  1. Congress enables the Environmental Protection Agency to regulate air and water pollution. This congressional act is

 

  1. divine right.
  2. a delegation of legislative power.
  3. a gap-filling power.
  4. arbitrary and capricious.

 

answer:     b                              PAGES:   Section 2                TYPE:       +

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. Grid Tools & Hardware Company is subject to a decision by the Consumer Product Safety Commission. Opposed to the decision, Grid Tools wants a court to review it. First, however, the firm must use all of the potential administrative remedies. This is

 

  1. an actual controversy at issue.
  2. standing to sue.
  3. the exhaustion doctrine.
  4. the ripeness doctrine.

 

ANSWER:     C                              PAGES:   Section 2                TYPE:       =

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. The functions of the National Transportation Safety Board, like those of other federal adminis­trative agencies, include

 

  1. adjudication.
  2. declaration.
  3. enunciation.
  4. pronunciation.

 

answer:     A                              PAGES:   Section 2                TYPE:       =

BUSPROG: Reflective                             AICPA: BB-Legal

 

 

 

  1. Maxi Retail Corporation is subject to a decision by the National Labor Relations Board. Maxi Retail appeals the decision, arguing that it is arbitrary and capricious. This could mean that the decision

 

  1. followed a consideration of legally appropriate factors.
  2. justifiably changed the agency’s prior policy.
  3. was accompanied by a rational explanation.
  4. was plainly contrary to the evidence.

 

ANSWER:     D                              PAGES:   Section 3                TYPE:       =

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. The Securities and Exchange Commission decides to create a new rule relating to the dissemination of material nonpublic information through corporate Web sites. This process begins with

 

  1. an on-site inspection.
  2. the filing of a complaint against a charged party.
  3. the publication of a notice of proposed rulemaking.
  4. the solicitation of public comments.

 

answer:     C                              PAGES:   Section 3                TYPE:       +

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. To notify the public of a proposed rule, the U.S. Office of Labor-Management Standards, like other federal agencies, publishes the proposal in

 

  1. the Administrative Procedure Act.
  2. the Code of Federal Regulations.
  3. the Federal Register.
  4. the United States Code.

 

answer:     B                              PAGES:   Section 3                TYPE:       N

BUSPROG: Reflective                             AICPA: BB-Legal

 

 

 

  1. In reviewing the actions of the U.S. Bureau of Land Management and other federal agencies, the courts

 

  1. are usually reluctant to review questions of fact.
  2. rarely defer to the technical expertise of administrative agencies.
  3. often rule on the merits of policy determinations.
  4. never defer to an agency’s interpretation of law.

 

answer:     a                              PAGES:   Section 4                TYPE:       =

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. The U.S. Patent and Trademark Office (USPTO) wants to review certain records of Omni App Corporation. The USPTO can legitimately gain access to the records through

 

  1. agency coercion.
  2. infiltrating Omni App’s computers without the firm’s knowledge.
  3. public comment.
  4. Omni App’s voluntary compliance.

 

answer:     D                              PAGES:   Section 5                TYPE:       +

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. Armando is a witness in a contro­versy involving the U.S. Bureau of Tobacco and Firearms. Armando can be compelled to appear before an adminis­trative law judge if he is served with

 

  1. an order for specific performance.
  2. an executive order.
  3. a subpoena.
  4. a search warrant.

 

answer:     C                              PAGES:   Section 5                TYPE:       +

BUSPROG: Reflective                             AICPA: BB-Legal

 

 

 

  1. The U.S. Food Safety and Inspection Service conducts searches of certain businesses. This agency and other administrative agencies can conduct warrantless searches in

 

  1. all industries.
  2. highly regulated industries.
  3. no industries.
  4. newly regulated industries only.

 

answer:     B                              PAGES:   Section 5                TYPE:       =

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. The U.S. Fish and Wildlife Service discovers that Grosse Farm Fisheries, Inc. has violated a federal regulation. If no negotiated settlement can be reached, the agency will most likely

 

  1. issue a formal complaint against Grosse Farm.
  2. do nothing.
  3. file a petition with the U.S. Supreme Court.
  4. impose immediate sanctions on Grosse Farm.

 

ANSWER:     A                              PAGES:   Section 5                TYPE:       N

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. The Occupational Safety and Health Administration (OSHA) discovers that Petro Refinery, Inc., is violating an OSHAS regulation. If this situation is resolved like most such disputes, the outcome will be

 

  1. a negotiated settlement.
  2. a trial and a fine.
  3. a trial and an appeal to a higher authority.
  4. a trial and the dissolution of the business.

 

answer:     A                              PAGES:   Section 5                TYPE        =

BUSPROG: Reflective                             AICPA: BB-Legal

 

 

 

  1. Personnel Employment, Inc., has been ordered to appear at a hearing be­fore an administrative law judge of the Social Security Administration. A significant difference between a trial and an administrative hearing is that

 

  1. attorneys are not allowed to attend administrative hearings.
  2. clients are not allowed to communicate with their attorneys dur­ing adminis­trative hearings.
  3. hearsay can be introduced as evidence in an administrative hearing.
  4. the burden of proof is on the charged party to prove innocence.

 

answer:     C                              PAGES:   Section 5                TYPE:       =

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. The U.S. Small Business Administration issues a new regulation that will have a significant impact on a substantial number of small businesses. Under the Regulatory Flexibility Act, the agency must do all of the following except

 

  1. measure the cost that the rule will impose on small businesses.
  2. consider less burdensome alternatives.
  3. conduct a regulatory flexibility analysis.
  4. adjust the rule to the satisfaction of the regulated businesses.

 

answer:     D                              PAGES:   Section 6                TYPE:       N

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. A failure of the U.S. Drug Enforcement Administration to comply with a request under the Freedom of Information Act (FOIA) may be challenged in

 

  1. a federal district court.
  2. a hearing before the U.S. Freedom of Information Agency.
  3. a meeting with Congress’s FOIA subcommittee.
  4. a special conference with the president of the United States.

 

answer:     A                              PAGES:   Section 6                TYPE:       =

BUSPROG: Reflective                             AICPA: BB-Legal

 

 

 

  1. Closed meetings of the National Security Agency and other federal administrative agencies are permitted when

 

  1. the subject of the meeting concerns accusing a person of a crime.
  2. open meetings would frustrate the implementation of future actions.
  3. the subject of the meeting involves matters relating to future liti­ga­tion or rulemaking.
  4. all of the choices.

 

answer:     d                              PAGES:   Section 6                TYPE:       =

BUSPROG: Reflective                             AICPA: BB-Legal

 

 

Essay Questions

 

  1. Guitar Maker, Inc., makes guitars. The Occupational Safety and Health Administration (OSHA) proposes a safety rule governing the handling of wood and its dust in the workplace, including the woods that Guitar Maker uses in its operations. Guitar Maker contends that the rule will involve sub­stantial compliance costs without significantly increasing workplace safety. The firm sends a letter to OSHA indicating its objections to the pro­posed rule and enclosing research reports and other data sup­porting those objections. Does OSHA have any obligation to consider these objec­tions? What procedures must OSHA follow when it makes new rules, such as this one?

 

ANSWER:     In formulating new rules, a federal administrative agency has to follow specific rulemaking procedures. The most commonly used procedure is notice-and-comment rulemaking, which consists of three steps:  notice of the proposed rulemaking, a com­ment period, and the fi­nal rule. The notice of the proposed rulemaking proceeding is published in the Federal Register. The notice states where and when the proceed­ings will be held, the agency’s legal authority for making the rule, and the terms or subject matter of the proposed rule. Following publication of the notice, the agency must allow time for persons to comment in writing on the proposed rule. (If a hearing is held, the comments may be oral.) The agency need not respond to all comments, but it must respond to any signifi­cant comments that bear directly on the proposed rule.

Thus, if Guitar Maker’s comments are significant, OSHA must take them into consid­era­tion. OSHA can respond by either modi­fying its final rule or explain­ing, in a statement accompanying the rule, why it did not make any changes.

After the agency reviews the comments, it drafts the final rule and pub­lishes it in the Federal Register. Later, the rule is compiled with those rules of other federal agen­cies in the Code of Federal Regulations.

 

PAGES:         Section 3                                                                   type:       =

BUSPROG: Reflective                             AICPA: BB-Decision Modeling

 

  1. Friend2Friend, Inc., a social network provider, is cited by an Internal Revenue Service (IRS) representative for an underpayment of federal income tax. Friend2Friend’s accountants believed that the agency overlooked some of the firm’s legitimate tax deductions and credits. Erin, Friend2Friend’s chief executive officer, wants to challenge the assessment. What are Erin and Friend2Friend’s next steps?

 

ANSWER:     Friend2Friend cannot ask a court for an injunction to stop the en­forcement of the regulation until it has exhausted its administrative remedies.

Friend2Friend’s first step would be to appeal the IRS representa­tive’s order to the agency. After investigating, the agency might negoti­ate a settlement with Friend2Friend. If a settlement cannot be reached, and the agency still considers Friend2Friend in violation of the rule, the agency might is­sue a complaint against the firm. This would be an attempt to bring the firm into compliance and may be accompanied by a press release. Friend2Friend can respond by filing an answer to the charge, and may also re­spond with its own press release. If there is no settlement, there may be a hearing before an administrative law judge (ALJ). After the hearing, the ALJ will issue an initial order, and if Friend2Friend is still dissatisfied, the firm can appeal to the commission that governs the agency. If Friend2Friend is dis­satisfied with the commission’s decision, it may appeal to a federal court of appeals.  If there is no appeal, or if the commission and the court re­fuse to review the case, the ALJ’s order becomes final. Ultimately, Friend2Friend may appeal adverse rulings to the United States Supreme Court.

 

PAGES:         Section 5                                                                   type:       +

BUSPROG: Reflective                             AICPA: BB-Decision Modeling

 

Chapter 7

 

 

Criminal Law and Cyber Crime

 

 

 

 

N.B.:  TYPE indicates that a question is new, modified, or unchanged, as follows.

 

N      A question new to this edition of the Test Bank.

+       A question modified from the previous edition of the Test Bank.

=       A question included in the previous edition of the Test Bank.

 

 

true/false questions

 

  1. In a criminal case, the state must prove its case by a preponderance of the evidence.

 

answer:     F                               PAGES:   Section 1                TYPE:       N

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. The sanctions imposed on criminal wrongdoers are the same as those applied in civil cases.

 

ANSWER:     F                               PAGES:   Section 2                TYPE:       N

BUSPROG: Analytic                                AICPA: BB-Legal

 

  1. One element that normally must exist for a person to be convicted of a crime is the performance of a prohibited act.

 

answer:     T                               PAGES:   Section 2                TYPE:       +

BUSPROG: Analytic                                AICPA: BB-Legal

 

 

 

  1. The crime of theft requires only the taking of another person’s property, not the awareness that the property belongs to another.

 

answer:     F                               PAGES:   Section 2                TYPE:       N

BUSPROG: Analytic                                AICPA: BB-Legal

 

  1. The federal criminal code lists more than four thousand criminal offenses, all of which require a specific mental state.

 

ANSWER:     F                               PAGES:   Section 2                TYPE:       N

BUSPROG: Analytic                                AICPA: BB-Legal

 

  1. Corporate officers and directors may be held criminally liable for the actions of employees under their supervision.

 

ANSWER:     T                               PAGES:   Section 2                TYPE:       N

BUSPROG: Analytic                                AICPA: BB-Legal

 

  1. Falsifying public records or altering a legal document is larceny.

 

ANSWER:     F                               PAGES:   Section 3                TYPE:       N

BUSPROG: Analytic                                AICPA: BB-Leveraging Technology

 

  1. The crime of bribery occurs when the bribe is offered—it is not required that the bribe be accepted.

 

answer:     t                               PAGES:   Section 3                TYPE:       +

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. An employer’s failure to remit state withholding taxes that were collected from employee wages cannot constitute a crime.

 

answer:     F                               PAGES:   Section 3                TYPE:       N

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. Racketeering is a single crime—engaging in financial transactions to conceal the identity, source, or destination of illegally gained funds.

 

ANSWER:     F                               PAGES:   Section 3                TYPE:       N

BUSPROG: Analytic                                AICPA: BB-Legal

 

  1. The theft of trade secrets is a civil wrong but not a crime.

 

ANSWER:     F                               PAGES:   Section 3                TYPE:       N

BUSPROG: Reflective                             AICPA: BB-Risk Analysis

 

  1. In the event of a RICO violation, the government can seek the divestiture of a defendant’s interest in a business.

 

ANSWER:     T                               PAGES:   Section 3                TYPE:       N

BUSPROG: Analytic                                AICPA: BB-Legal

 

  1. The only defense to criminal liability that justifies the use of force is self-defense.

 

answer:     f                               PAGES:   Section 4                TYPE:       =

BUSPROG: Analytic                                AICPA: BB-Legal

 

  1. Once immunity is given, a person has an absolute privilege against self-incrimination and can no longer refuse to testify on Fifth Amendment grounds.

 

ANSWER:     T                               PAGES:   Section 4                TYPE:       N

BUSPROG: Analytic                                AICPA: BB-Legal

 

  1. For most crimes, the state must initiate prosecution within a certain number of years after the crime occurs.

 

ANSWER:     T                               PAGES:   Section 5                TYPE:       =

BUSPROG: Analytic                                AICPA: BB-Legal

 

  1. Under the Fourth Amendment, general searches through a person’s belongings are permissible.

 

answer:     F                               PAGES:   Section 5                TYPE:       N

BUSPROG: Analytic                                AICPA: BB-Legal

 

  1. If a person in custody is to be subjected to interrogation, he or she must first be informed in clear and unequivocal terms that he or she has the right to remain silent.

 

ANSWER:     T                               PAGES:   Section 5                TYPE:       N

BUSPROG: Reflective                             AICPA: BB-Leveraging Technology

 

  1. In a phishing attack, a perpetrator “fishes” for financial data and passwords from consumers by posing as a legitimate business.

 

ANSWER:     T                               PAGES:   Section 6                TYPE:       N

BUSPROG: Analytic                                AICPA: BB-Legal

 

  1. A company takes a risk by electronically storing their online customers’ credit-card numbers.

 

ANSWER:     T                               PAGES:   Section 6                TYPE:       +

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. No federal statute specifically addresses cyber crime.

 

answer:     F                               PAGES:   Section 6                TYPE:       N

BUSPROG: Analytic                                AICPA: BB-Legal

 

 

MULTIPLE-CHOICE QUESTIONS

 

  1. Reno, driving while intoxicated, causes a car accident that results in the death of Santo. Reno is arrested and charged with a felony. A felony is a crime punishable by death or imprisonment for

 

  1. any period of time.
  2. more than one year.
  3. more than six months.
  4. more than ten days.

 

ANSWER:     B                              PAGES:   Section 1                TYPE:       =

BUSPROG: Reflective                             AICPA: BB-Legal

 

 

 

  1. Maura enters a gas station and points a gun at the clerk Nate. She then forces Nate to open the cash register and give her all the money. Maura can be charged with

 

  1. burglary.
  2. robbery.
  3. larceny.
  4. receiving stolen property.

 

ANSWER:     B                              PAGES:   Section 3                TYPE:       N

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. Megan reaches into Ned’s pocket and takes his wallet—without his consent and without his immediate awareness. Unlike robbery, picking pockets does not involve

 

  1. breaking and entering.
  2. force or fear.
  3. large amounts of cash.
  4. weapons.

 

ANSWER:     B                              PAGES:   Section 3                TYPE:       =

BUSPROG: Reflective                             AICPA: BB-Critical Thinking

 

  1. Laird is an employee of Motor Parts, an auto parts store. On the orders of his employer, he switches trademarks on parts that come into the store to be sold to consumers. This is most likely

 

  1. forgery.
  2. larceny.
  3. robbery.
  4. obtaining goods by false pretenses.

 

answer:     A                              PAGES:   Section 3                TYPE:       +

BUSPROG: Reflective                             AICPA: BB-Legal

 

 

 

  1. Eartha receives from Fergie a guitar stolen from Harper. To be criminally liable, Eartha must

 

  1. know that Fergie is the thief.
  2. know that Harper is the true owner.
  3. know that the guitar is stolen.
  4. have paid for the guitar .

 

ANSWER:     C                              PAGES:   Section 3                TYPE:       +

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. Kimberly, the owner of Littleton Cinema, trusts Max to manage the theater’s daily cash flow. One night, without Kimberly’s knowledge or consent, Max takes and keeps $1,000 from the receipts. This is most likely

 

  1. embezzlement.
  2. larceny.
  3. robbery.
  4. burglary.

 

answer:     A                              PAGES:   Section 3                TYPE:       +

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. Quiana, an employee of Reservations for Less, Inc., pays Svetlana, an employee of Reservations for Less’ competi­tor Travel Cheap, Inc., for a secret Reservations for Less pricing schedule. This may be

 

  1. an effective marketing strategy.
  2. commercial bribery.
  3. insider trading.
  4. money laundering.

 

answer:     B                              PAGES:   Section 3                TYPE:       +

BUSPROG: Reflective                             AICPA: BB-Legal

 

 

 

  1. Owen uses the Internet to defraud Prairie Valley Credit Union. He is found guilty of wire fraud. He can be punished by

 

  1. imprisonment for not more than one year.
  2. imprisonment for up to thirty years and fines of up to $1 million.
  3. fines for not more than $50,000.
  4. death.

 

answer:     B                              PAGES:   Section 3                TYPE:       N

BUSPROG: Analytic                                AICPA: BB-Legal

 

  1. Dreyfus points a gun at Eton, threatening to shoot him if he does not steal from his employer, Freddy’s Gas & Shop store, and give the stolen funds to Dreyfus. Charged with theft, Eton can successfully claim, as a defense

 

  1. nothing.
  2. duress.
  3. entrapment.
  4. self-defense.

 

ANSWER:     B                              PAGES:   Section 4                TYPE:       +

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. Skip is accused of a crime. Skip can refuse to provide information about his allegedly criminal activities

 

  1. if he suspects the information will be used to prosecute him.
  2. if the police do not promise to keep the information confidential.
  3. if the information is “fruit of the poisonous tree.”
  4. under no circumstances.

 

ANSWER:     A                              PAGES:   Section 4                TYPE:       N

BUSPROG: Reflective                             AICPA: BB-Legal

 

 

 

  1. Klay arrests Leonida on suspicion of embezzlement. According to the United States Supreme Court in Case 7.3, Miranda v. Arizona, Leonida must be apprised of certain constitutional rights

 

  1. after any police interrogation.
  2. at any time during police interrogation.
  3. only at the request of the suspect’s attorney.
  4. prior to any police interrogation.

 

answer:     D                              PAGES:   Section 5                TYPE:       +

BUSPROG: Communication                                                   AICPA: BB-Legal

 

  1. Nini, a police officer, wants to search the offices of Operational Business Corporation. She asks Judge Pearl to issue a warrant. Under the Fourth Amendment, no warrant for a search can be issued without

 

  1. double jeopardy.
  2. probable cause.
  3. reasonable doubt.
  4. immunity.

 

ANSWER:     B                              PAGES:   Section 5                TYPE:       N

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. Landon is arrested at a warehouse in Metro Corporate Park. A government prosecutor issues a formal charge against Landon for receiving stolen property. This charge is an

 

  1. arraignment.
  2. indictment.
  3. information.
  4. interrogation.

 

ANSWER:     C                              PAGES:   Section 5                TYPE:       +

BUSPROG: Reflective                             AICPA: BB-Legal

 

 

 

  1. Ajay sells “Bulk Up” steroids over the Internet. He is arrested and charged with the sale of a controlled substance. This is cyber crime, which is

 

  1. a new category of crime that is not related to older types of crime.
  2. a crime that occurs in the virtual community of the Internet.
  3. a crime that is less real than the same crime in the physical world.
  4. no crime.

 

answer:     B                              PAGES:   Section 6                TYPE:       +

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. Posing as Platinum Bank, Quentin e-mails Rachel, asking her to update her personal banking information through a link in the e-mail. She clicks on the link and types in the data, which Quentin promptly sells to Spence. This is

 

  1. hacking.
  2. identity theft.
  3. cyberterrorism.
  4. bribery.

 

answer:     B                              PAGES:   Section 6                TYPE:       N

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. Via the Internet, Porcio sabotages the computer system of Quik Chik’n Company, a fast-food restaurant operator, to alter the ingredients in the company’s recipes and products so that consumers of the foods become ill. Porcio is a

 

  1. cyberterrorist.
  2. botnet.
  3. virus.
  4. worm.

 

ANSWER:     A                              PAGES:   Section 6                TYPE:       N

BUSPROG: Reflective                             AICPA: BB-Legal

 

 

 

  1. Chaz uses his computer to secretly install software on thousands of personal computers without their owners’ knowledge. The program can reproduce itself and spread from one computer to another via any USB port. This program is a

 

  1. hacker.
  2. botnet.
  3. virus.
  4. worm.

 

ANSWER:     D                              PAGES:   Section 6                TYPE:       +

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. Gem programs software to prompt a computer to continually crash and reboot. Gem intends to install this program on various companies’ computer systems without the companies’ knowledge. The program can reproduce itself, but must be attached to a host file to travel from one computer network to another. This program is a

 

  1. hacker.
  2. botnet.
  3. virus.
  4. worm.

 

ANSWER:     C                              PAGES:   Section 6                TYPE:       +

BUSPROG: Reflective                             AICPA: BB-Legal

 

  1. Farouk uses his computer to break into Global Financial Center’s computer. Farouk is a

 

  1. hacker.
  2. virus.
  3. phisher.
  4. worm.

 

answer:     A                              PAGES:   Section 6                TYPE:       +

BUSPROG: Reflective                             AICPA: BB-Legal

 

 

 

  1. Leslie commits an act via e-mail against Money Investment Company, a business in New York, where the act is a cyber crime. Leslie resides in Ohio, where the act is not a crime. Prosecution of Leslie in New York involves questions of

 

  1. jurisdiction.
  2. malware.
  3. phishing.
  4. service-based hacking.

 

ANSWER:     A                              PAGES:   Section 6                TYPE:       +

BUSPROG: Reflective                             AICPA: BB-Legal

 

 

Essay Questions

 

  1. Babs sees an e-book reader on the porch of Coco’s house, takes the reader to her home, and tells everyone she owns it. Danno, wielding a knife, forces Easter to give him her smartphone, and runs away with it. Fritz breaks into Ginger’s apartment, takes a laptop, and leaves. Hazel sells Idi an expensive wristwatch for a fraction of its value, admitting that the watch is stolen property but claiming that she is not the thief. Which of these acts are crimes, and what are the differences among them?

 

ANSWER:     Babs has wrongfully taken and carried away the personal property of an­other with the intent to permanently deprive the owner of that property. This is larceny.

Danno has unlawfully and forcibly taken the personal property of an­other. This is robbery.

Fritz has broken into and en­tered a dwelling with the intent to commit a felony. This is burglary.

The basic differences: burglary requires breaking and entering a build­ing without the use of force against a person; robbery does not involve any breaking and entering, but force is required; and larceny is the tak­ing of per­sonal property without force and without breaking and enter­ing a building. Generally, because force is used, robbery is considered the most serious of these crimes and carries the most severe penalties. Because larceny involves no force or threat to human life, it carries the least se­vere penalty of the three. Burglary, because it involves breaking and en­tering, frequently into people’s homes, carries a lesser penalty than rob­bery but a greater penalty than larceny.

Idi committed the crime of receiving stolen goods. She was aware that the watch was stolen property but she bought it anyway. That Hazel knew the watch was stolen indicates she committed the same crime as Idi—receiving stolen goods—when she initially obtained the watch.

 

PAGES:         Section 3                                                                   type:       =

BUSPROG: Reflective                             AICPA: BB-Decision Modeling

 

  1. Cameron is an accountant in the accounting department of Data Analytics Company. Cameron’s son’s college tuition is due within a week, or he cannot continue taking classes. To meet the due date, Cameron transfers funds from Data Analytics to a fictitious bank account, planning to repay the firm within one month. The transfer is discovered before the firm is re­paid, and Cameron is arrested. What crime, or crimes, if any, has Cameron committed?

 

ANSWER:     Cameron committed at least embezzlement.

The crime of embez­zlement is committed when a person entrusted with another’s funds or property fraudulently appropriates it. That Cameron may have intended to repay the “borrowed” funds is no defense (although an embezzler who re­turns what has been taken may not be prosecuted because the owner may not wish to take the time to make a complaint, give depositions, and ap­pear in court, or to reveal that the firm failed to have safeguards against embezzlement).

Depending on how Cameron engineered the theft, he may have committed other crimes—forgery, larceny, or a computer crime, for example.

 

PAGES:         Section 3                                                                   type:       =

BUSPROG: Reflective              AICPA: BB-Decision Modeling