A CPA Firm Is Sued After Performing a Review of a Client's

question 59

True/False

A CPA firm is sued after performing a review of a client's financial statements for not uncovering a material misstatement. The CPA firm in this situation can claim lack of duty as a legal defense.

Identify and analyze information from an adjusted trial balance.

Recognize the components and importance of an end-of-period spreadsheet.

Understand the characteristics and differences of various organizational structures (functional, divisional, matrix, network).

Recognize the suitability of different organizational structures for specific organizational strategies and needs.

---

Definitions:

Conditional Sales Agreement

An agreement where the sale is contingent on meeting specific conditions, such as the buyer making all payments as agreed.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, giving a snapshot of its financial condition and liquidity.

Payment Schedule

A plan that outlines the dates and amounts for payments due over a period.

CRA

Can refer to the Canada Revenue Agency, the agency responsible for the administration of tax laws for the Canadian government, or to the Community Reinvestment Act, a United States federal law designed to encourage commercial banks and savings associations to help meet the needs of borrowers in all segments of their communities.