Consider the Following Short Case as You Respond to the Next

question 8

Multiple Choice

Consider the following short case as you respond to the next question: Amanda is a partner in a CPA firm; she supervises a staff of ten professionals, some of whom are already licensed CPAs and some of whom are still working toward licensure. She is responsible for audits of independent bookstores in California, Nevada and Arizona. Amanda is concerned that the less experienced professionals she supervises are repeating the mistakes she and the more experienced professionals on her team made when they began auditing. She therefore wants to create a knowledge management system.In assigning personnel to a specific audit team, Amanda normally has one licensed CPA working with a professional who is not yet licensed. Rather than considering alternative approaches to the audit that might achieve the same goals more efficiently, the licensed CPAs in Amanda's firm rely on their past practice in conducting audits. The licensed CPAs are therefore demonstrating:

• A)Bounded rationality.
• B)At least one countermeasure for information overload.
• C)Both A and B.
• D)Neither A nor B.

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Definitions:

Negligence

A failure to behave with the level of care that someone of ordinary prudence would have exercised under the same circumstances, often leading to harm or damage.

Breached

The act of failing to fulfill the terms of a contract, agreement, or duty.

Tortfeasor

A person who commits an intentional or through-negligence tort that causes a harm or loss for which a civil remedy may be sought.

Fraudulent Misrepresentation

A false statement of fact made by one party to another, with the intention of inducing the latter into entering a contract, resulting in harm or loss.