If the Public Accountant Negligently Failed to Properly Prepare and File

question 103

Multiple Choice

If the public accountant negligently failed to properly prepare and file a client's tax return,the public accountant can be held liable for

• A)the penalties the client owes Canada Revenue Agency.
• B)the penalties and interest the client owes.
• C)the penalties and interest,plus the tax preparation fee that the public accountant charged.
• D)the penalties and interest,the tax preparation fee,and the amount of tax that was underpaid.

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Definitions:

Vacation Pay

Compensation paid to employees for days they are entitled to take off work but choose to work instead or as a benefit for days they are allowed not to work.

Sick Pay

Compensation provided by an employer to an employee who is absent from work due to illness.

Accrual

Accrual accounting is an accounting method where revenues and expenses are recorded when they are earned or incurred, regardless of when the cash transaction occurs.

Footnote Disclosure

Additional notes included in financial statements to provide more detailed information about the company's fiscal status, accounting policies, or individual line items.