5105/5005LBSAF Law for Accountants Assignment
The assessment is an individual one and you need to be aware that plagiarism is taken seriously so do not copy or share your work with other students.
Learning outcomes:
- LO1 – Apply the Law of Contract to a factual situation.
- LO2 – Explain the duty of the auditor and the limits on the tortious liability of the auditor.
- LO3 – Apply the Law of Agency to a factual situation.
In your assessment, you should ensure that you cite and reference all your sources according to the Harvard convention. If you have doubts about how to use this convention, refer to the on-line guidance at:
You should include references to all cited sources in a single list at the end of the assessment.
There are THREE PARTS to the coursework. All parts must be completed
The assessment should be word-processed and the font size should be 12
There is no format for the assessment and students should answer each question, using references to support their answer.
The word count for the assessment is up to 1,500 words. 5105/5005LBSAF Law for Accountants Assignment
Summative assessment – the mark for the coursework assessment will be given to you with detailed feedback on the 17th of November 2023.
Queries relating to the coursework should be directed in first instance to your tutor either in class or via email or by making an appointment to see the tutor face to face.
PART 1
Gizmo Limited has been targeted by a group of cybercriminals. Overnight, the group breached Gizmo Limited’s website and altered the price of all items on the website to just £10. Expensive items such as televisions that cost thousands of pounds were reduced to less than £10 at the online checkout. A media frenzy quickly escalated, with customers posting on Instagram and Twitter that they had managed to purchase a variety of expensive items at a massive discount. The following day the website was closed down when the management team became aware of the breach.
Many customers had ordered goods for collection using the click-and-collect option and had arranged to pick up their purchases from Gizmo’s stores.
When the management team realized the mistake, they told staff not to hand over orders.
Kane, a customer who had placed an order wrote on a deals website “When I arrived to collect my order, a member of staff at the company had threatened to charge me the full amount for the goods. Surely this is not my problem that they have experienced a cyber attack.
Another customer, Trisha said “Gizmo’s just called me and said if I don’t bring the items back and get refunded what I’ve paid they are going to charge me the full amount. I have a receipt. Are they allowed to do that? Please help me, I can’t afford to pay thousands of pounds.”
But later the company said in a statement: “We have reviewed all transactions and those customers affected are being contacted today and issued a refund. This does not affect any customers that have already received a delivery or collected their goods.”
Raj, 65, of Southport, bought a 90 inch television for her husband, which has a retail price of £1,999.99, for just £9.99.
He was sent a confirmation email and a shipping invoice which said the item had been “quality checked and packed, and is now on the way to you.”
Raj said: “It seemed like too good a deal to ignore. It’s obviously disappointing they won’t honor it.”
Required:
- What is the legal position regarding both Gizmo’s Limited and the customers who have ordered goods at really low prices?
- Include details of all the elements needed to form a contract.
- Does it make any difference whether the goods have been delivered or not?
(Approximately 500 words) [30 marks]
PART 2
Accountancy firm ‘ERD Accountants signed off the audit of the accounts of Elijah Craig Ltd, a construction company, whose accounts showed sound financial health. Within months of this Elijah Craig Ltd had collapsed.
Legal proceedings have begun and Fury’s Bank has sued ERD Accountants for negligence because they say that ERD should have identified fraudulent activity taking place within the company.
The claim of negligence was based on the fact that ERD Accountants had failed to discover fraudulent overstatements of the group’s true financial position.
ERD Accountants had included a clear note within their audit report that “it is management’s responsibility to address the going concern of Elijah Craig Ltd, and management is responsible for identifying fraud and ensuring proper procedures are in place to prevent it, ERD Accountants hold no responsibility to anyone else for their audit work”.
Required:
- What is the current legal position regarding negligence by professionals in the UK and how has this developed over the years?
- Is Fury’s Bank likely to be successful in its lawsuit, and why?
You need to discuss at least 6 relevant cases including 3 from the last 10 years.
(Approximately 500 words) [30 marks]
PART 3
Roberto and his friend Sheila are having a drink in a cafe. They are discussing cars, as Sheila has just been offered a job and will require a car to get to her new place of work. Sheila does not know much about cars and asks Roberto to find a reliable car for her, as a favor. Roberto finds a 3-year-old car from a local second-hand supplier and recommends it as a good purchase to Sheila. A week after Sheila purchased the car, it failed to start up. A mechanic at her local garage checked the car over and informed Sheila that the car had a number of mechanical defects and that it had been repaired badly after a previous failure.
Question
Advise Sheila, who wishes to know if she has any recourse in law against Roberto, who she believes acted as her agent in the purchase of the car. Use legal sources and case law to support your answer.
(Approximately 500 words) [30 marks]