Which of the Following Is a Correct Statement Related to CPA

question 26

Multiple Choice

Which of the following is a correct statement related to CPA legal liability under common law?

• A)CPAs are normally liable to their clients,the shareholders,for either ordinary or gross negligence.
• B)CPAs are liable for either ordinary or gross negligence to identified third parties for whose benefit the audit was performed.
• C)CPAs may escape all personal liability through incorporation as a limited liability corporation.
• D)CPAs are guilty until they prove that they performed the audit with "good faith."

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Definitions:

Check Stub

A check stub is the part of a check that is kept as a record by the issuer, detailing the amount, date, and payee of the check.

Cash Balance

The amount of currency that a company or individual has on hand, including deposits in bank accounts that are available for immediate use.

Deposit

A sum of money placed into an account or given as partial payment to secure a purchase or service.

Check Register

A record of checks written, deposits made, and balances for a checking account.