When Performing an Audit, a CPA Will Most Likely Be

question 25

Multiple Choice

When performing an audit, a CPA will most likely be considered negligent when the CPA fails to:

• A)detect all of a client's fraudulent activities.
• B)include a negligence disclaimer in the client engagement letter.
• C)warn a client of known internal control weaknesses.
• D)warn a client's customers of embezzlement by the client's employees.

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Definitions:

Valid Assignment

is the effective transfer of rights or obligations that meets all legal requirements, ensuring enforceability.

Delegation of Duties

The act of assigning specific responsibilities or tasks to someone else, often within the context of a contract or organizational structure, while retaining ultimate accountability.

Sale of Widgets

The sale of widgets refers to the commercial transaction of buying and selling widgets, which are fictional, general-purpose devices or products often used in economic examples.

Delegation of Duties

The act of assigning responsibility and authority for specific tasks or functions from one person or group to another while retaining ultimate responsibility.