CPA Risk Management Crash Course Quiz
CPA Risk Management Crash Course Quiz
Test Your Knowledge with Our Interactive Quiz!
As a accounting professional, how knowledgeable are you about risk management surrounding best practices for your staff and firm?
Thank you for taking our short quiz to test your knowledge of common accounting risk management best practices. For each question, there is only one correct answer. Once you have completed the quiz, you can receive your results and learn more!
QUESTION 1
From A Risk Management Perspective, What Is The Key Component In The Items For Client Follow-up Section Of A Termination Letter?
Forthcoming filing or other deadlines and the consequences if the client should miss the deadline(s).
Correct!
The key component in the items for client follow-up section of a termination letter is .. Forthcoming filing or other deadlines and the consequences if the client should miss the deadline(s).
The letter should clearly map out the client's responsibilities going forward and issues that should be raised with a successor CPA. Matters of particular importance to include are deadlines (statutory, regulatory, or operational), internal control weaknesses or breakdowns and indicators of potential fraud or violations of laws and regulations.
Incorrect!
The right answer is…
Forthcoming filing or other deadlines and the consequences if the client should miss the deadline(s).
The letter should clearly map out the client's responsibilities going forward and issues that should be raised with a successor CPA. Matters of particular importance to include are deadlines (statutory, regulatory, or operational), internal control weaknesses or breakdowns and indicators of potential fraud or violations of laws and regulations.
QUESTION 2
__% of small companies close within 6 months of falling victim to a data breach or cyber attack?
10%
Correct!
60% of small companies close within 6 months of falling victim to a data breach or cyber attack
CPA firms are under constant threat of a cyber-attack based upon the abundance of confidential and sensitive client data they receive, use, and store. Not all threats emanate from outside the firm. CPA firms can also face threats as a result of their failure to properly and timely address their own system vulnerabilities.
Incorrect!
The right answer is…
60% of small companies close within 6 months of falling victim to a data breach or cyber attack.
CPA firms are under constant threat of a cyber-attack based upon the abundance of confidential and sensitive client data they receive, use, and store. Not all threats emanate from outside the firm. CPA firms can also face threats as a result of their failure to properly and timely address their own system vulnerabilities.
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Opens in a new window.QUESTION 3
In the past 20 years, employee lawsuits have increased approximately:
Correct!
Right On! That's right.
Employee lawsuits have increased approximately... 400% 1
Employee Lawsuits arise in many forms, including discrimination due to: disability, gender, equal pay, pregnancy, age, religion, and many other situations. The average out-of-court settlement is $217,000 if you go to court and lose!2
Incorrect!
Oops! Sorry that is the wrong answer!
Employee lawsuits have increased approximately... 400% 1
Employee Lawsuits arise in many forms, including discrimination due to: disability, gender, equal pay, pregnancy, age, religion, and many other situations. The average out-of-court settlement is $217,000 if you go to court and lose!2
QUESTION 4
When should a CPA purchase tail coverage?
Correct!
Right On! That’s correct!
CPA’s should purchase tail coverage when selling a firm, merging with another firm and/or retiring from a firm.
If a CPA is considering closing, selling their firm, merging with another firm and/or retiring, they should consider purchasing an Extended Claim Reporting Period endorsement. This is commonly referred to as “tail” coverage. Generally, tail coverage provides an extended period of time after the end of the policy period during which claims may be covered for work completed during the policy period. The claim may be first made and reported during the tail if it arises out of a wrongful act that occurred during the Policy period.
Incorrect!
Oops! Sorry that is the wrong answer!
The correct answer: Retirement, Merging, and/or Selling a Firm
If a CPA is considering closing, selling their firm, merging with another firm and/or retiring, they should consider purchasing an Extended Claim Reporting Period endorsement. This is commonly referred to as “tail” coverage. Generally, tail coverage provides an extended period of time after the end of the policy period during which claims may be covered for work completed during the policy period. The claim may be first made and reported during the tail if it arises out of a wrongful act that occurred during the Policy period.
QUESTION 5
What’s the average cost of an Employee theft claim?
Correct!
Right On! That’s correct!
The average cost of an Employee theft claim is $130,0003
As we stated earlier, employee lawsuits have increased 400% with the average cost of a claim at $130,000. EmployerGard policyholders of the AICPA Insurance Program have access to Beyond, a self-service portal providing risk management resources on various workplace topics, including the investigation of discrimination and harassment complaints.
Incorrect!
Oops! Sorry that is the wrong answer!
The correct answer is: $130,000
As we stated earlier, employee lawsuits have increased 400% with the average cost of a claim at $130,000. EmployerGard policyholders of the AICPA Insurance Program have access to Beyond, a self-service portal providing risk management resources on various workplace topics, including the investigation of discrimination and harassment complaints.
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The amount of money and sensitive information accounting professionals work with allows them to be easy targets for cyber attacks and professional liability lawsuits. At AICPA Member Insurance Programs, we've designed specialized insurance designed for CPAs to fit your business and lifestyle. We are proud to be the only AICPA-endorsed insurance provider, covering over 23,000 CPA firms and 264,000 AICPA Members.