Which of the Following Is False Regarding Compliance with GAAP

question 19

Multiple Choice

Which of the following is false regarding compliance with GAAP and GAAS?

• A) Failure to comply with GAAP and GAAS will almost certainly constitute a breach of duty.
• B) Compliance with GAAP and GAAS does not automatically mean that the duty of care has been met.
• C) In some circumstances, a reasonable, competent accountant would do more than that the GAAP or GAAS requires.
• D) GAAP standards are established by the Financial Accounting Standards Board, and GAAS standards are established by the American Institute of Certified Public Accountants.
• E) State statutes may not impose additional legal requirements on accountants beyond GAAP and GAAS.

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Definitions:

Administrative Expenses

Costs related to the general operation of a business, including expenses such as office supplies, salaries of non-sales personnel, and rent.

Employee Claims

Rights or demands made by workers against their employer for various benefits, compensation, or acknowledgments of rights or wrongs.

Unpaid Taxes

Taxes that are owed to the government but have not been paid by the due date.