Identify different types of insurance, and the reasons for which they may be used.

After completion of this module, student should be able to:
· Identify different types of insurance, and the reasons for which they may be used.
· Recognize the requirements for a valid insurance contract.
· Identify situations in which professionals may be liable to clients for breach of contract, negligence or fraud.
· Understand that there may be situations in which professionals may be liable to third parties with whom they have no direct contract.
· Demonstrate familiarity with the Sarbanes-Oxley Act of 2002 and be able to identify some requirements imputed to accounting firms by the Act.
· Recognize potential areas for civil and criminal liability for accountants under securities laws.
Assignment
Read Chapters 50 & 51 in your text.
Review Powerpoints for Chapters 50 & 51 posted in the Modules.
Take the short online quizzes for Chapter 50 & Chapter 51 .
Complete the assigned problems and submit the Module 10 Assignment
In the interest of levity for this final module, please have a look, and hopefully a laugh at the following link – Insurance Claims
(Links to an external site.)
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If your name is listed here, post an internet link to the Module 10 Topic on the message board that explains the concept/term assigned to you as it relates to the text materials –

Universal Life Twinkal Patel

If your last name begins with the letters ‘A’ through ‘M,’ complete problems 1 & 3
If your last name begins with the letters ‘N’ through ‘Z,’ complete problems 2 & 4
Automobile Insurance Jowenna Surber owned a Mercedes- Benz automobile that she insured through an insurance broker, Mid- Century Insurance Company ( Mid- Century). Mid- Century secured a policy for Surber with the Farmers Insurance Company ( Farmers). Surber gave permission to her friend, Bruce Martin, to use the car. Martin held a valid California driver’s license. Surber did not receive any compensation for allowing Martin to use the car. While driving the car, Martin was involved in a collision with another vehicle, driven by Loretta Haynes, who suffered severe injuries. Martin admitted that his negligence was the cause of the accident. Surber’s policy stipulates that the policy covers “ you or any family member or any person using your insured car.” Is Farmers liable to Haynes? Mid- Century Insurance Company v. Haynes, 218 Cal. App. 3d 737, 267 Cal. Rptr. 248, Web 1990 Cal. App. Lexis 219 ( Court of Appeal of California)
Automobile Insurance Antonio Munoz and Jacinto Segura won some money from two unidentified men in a craps game in a Los Angeles park. When Munoz and Segura left the park in Segura’s car, the two men followed them in another car. They chased Segura’s car for several miles and then pulled beside it on a freeway. The men in the other car fired several gunshots at Segura’s car, killing Munoz. At the time he was killed, Munoz had an automobile insurance policy issued by Nationwide Mutual Insurance Company ( Nationwide). A provision in the policy covered damages from “ an accident arising out of the use of an uninsured vehicle.” Munoz’s widow and child filed a claim with Nationwide to recover for Munoz’s death. Nationwide rejected the claim. Who wins? Nationwide Mutual Insurance Company v. Munoz, 199 Cal. App. 3d 1076, 245 Cal. Rptr. 324, Web 1988 Cal. App. Lexis 259 ( Court of Appeal of California)
Accountant’s Liability to Third Party Giant Stores Corporation ( Giant) hired Touche Ross & Co. ( Touche), a national CPA firm, to conduct audits of the company’s financial statements for two years. Touche gave an un-qualified opinion for both years. Touche was unaware of any specific use of the audited statements by Giant. After receiving copies of these audited financial statements from Giant, Harry and Barry Rosenblum ( Rosenblums) sold their retail catalog showroom business to Giant in exchange for 80,000 shares of Giant stock. One year later, a major fraud was uncovered at Giant that caused its bankruptcy. Because of the bankruptcy, the stock that the Rosenblums received became worthless. In conducting Giant’s audits, Touche had failed to uncover that Giant did not own certain assets that appeared on its financial statements and that Giant had omitted substantial amounts of accounts payable from its records. The Rosenblums sued Touche for ac-counting malpractice. Is Touche liable for accounting malpractice under any of the three negligence theories discussed in this chapter? H. Rosenblum, Inc. v. Adler, 93 N. J. 324, 461 A. 2d 138, Web 1983 N. J. Lexis 2717 ( Supreme Court of New Jersey)
Ultramares Doctrine Texscan Corporation ( Texscan) was a corporation located in Phoenix, Arizona. The company was audited by Coopers & Lybrand ( Coopers), a national CPA firm that prepared audited financial statements for the company. The Lindner Fund, Inc., and the Lindner Dividend Fund, Inc. ( Lindner Funds), were mutual funds that invested in securities of companies. After receiving and reviewing the audited financial statements of Texscan, Lindner Funds purchased securities in the company. Thereafter, Texscan suffered financial difficul-ties, and Lindner Funds suffered substantial losses on its investment. Lindner Funds sued Coopers, alleging that Coopers was negligent in conducting the audit and pre-paring Texscan’s financial statements. Can Coopers be held liable to Lindner Funds for accounting malpractice under the Ultramares doctrine, Section 552 of the Restatement ( Second) of Torts, or the foreseeability standard? Lindner Fund v. Abney, 770 S. W. 2d 437, Web 1989 Mo. App. Lexis 490 ( Court of Appeals of Missouri)

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