A CPA Firm Agrees to Complete an Audit by the 28^th

question 47

Multiple Choice

A CPA firm agrees to complete an audit by the 28^th of February because it has been informed of a deadline set by a prospective lender to the client.If the audit report is not finished until the end of March then:

• A)the firm would be liable even though the delay was due to the client's having obstructed performance of the audit.
• B)the accounting firm would not be liable if they had other deadlines to meet at the same time.This could be used as a complete defense.
• C)the accountant would be liable for the client's resulting loss if the lender has no more funds available at that time.
• D)the firm would not be liable if they have delegated their responsibilities to another CPA firm.

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Definitions:

Narrow Minded

Having or showing a limited outlook or willingness to consider alternative ideas, perspectives, or options.

Operations

The day-to-day activities involved in running a business, producing goods, or providing services, focusing on efficiency and effectiveness of the process.

Internal Locus

The belief that individuals control their own destiny and outcomes are primarily the result of their own efforts.

Trust Instincts

Reliance on one's innate intuition or feelings in making decisions, especially in situations where complete information is not available.