Which of the Following Is Accurate with Respect to Litigation

question 41

Multiple Choice

Which of the following is accurate with respect to litigation involving CPAs?

• A)A CPA will not be found liable for an audit unless the CPA has audited all affiliates of that company.
• B)A CPA may not successfully assert as a defense that the CPA had no motive to be part of a fraud.
• C)A CPA may be exposed to criminal as well as civil liability.
• D)A CPA is primarily responsible,while the client is secondarily responsible for the notes in an annual report filed with the SEC.

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Definitions:

Work in Process

Work in process (WIP) refers to partially finished goods that are still undergoing manufacturing processes but are not yet complete products.

Materials Purchased

The total cost of raw materials bought by a company for the purpose of production in a given period.

Materials Requisitioned

The process or document used to request and authorize the release of materials from the inventory for production or other uses.

Production Department

A segment of a business that is responsible for the manufacture of goods.