The Due Care Principle in the AICPA Code

question 18

Multiple Choice

The due care principle in the AICPA code:

• A) Addresses the quality of the individual who performs professional services
• B) Addresses the quality of services performed by the CPA
• C) Addresses whether the independence standards have been met
• D) Addresses whether integrity and objectivity have been compromised

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Definitions:

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, profits, or losses.

Trading Securities

Financial instruments that are purchased primarily for selling in the near term with the intention of generating profit from short-term price fluctuations.

Fair Value

The amount one would get from selling an asset or the cost to transfer a liability during a well-structured deal between participants in the market at the time of evaluation.

Profit Margin

A financial metric that evaluates a company's profitability by comparing net income to sales.