If a CPA Recklessly Departs from the Standards of Due

question 17

Multiple Choice

If a CPA recklessly departs from the standards of due care when conducting an audit,the CPA will be liable to third parties who are unknown to the CPA based on

• A)Negligence.
• B)Gross negligence.
• C)Strict liability.
• D)Criminal deceit.

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Definitions:

Gross Margins

The difference between revenue and cost of goods sold divided by revenue, expressed as a percentage, indicating the financial health and profitability of a business.

Value Basis

The underlying worth of an asset from which sale prices or depreciation is derived.

Joint Costs

Costs that are incurred from producing two or more products at the same time.

Intermediate Calculations

Steps or computations performed within a larger mathematical, financial, or statistical process that are necessary for reaching the final result.