Which of the Following Statements About the Statements on Standards

question 83

Multiple Choice

Which of the following statements about the Statements on Standards for Tax Services is true?

• A)A CPA is never allowed to use a taxpayer's estimates when preparing a tax return.
• B)The CPA must tell the IRS upon becoming aware that an error has been made on a past tax return.
• C)The CPA may in good faith rely on information provided by the taxpayer, without verifying the reliability of that information if reasonable inquiries are made where the information furnished appears to be incorrect.
• D)The CPA should not recommend that a taxpayer take a certain position if there is any doubt as to whether the position would be approved by the IRS upon audit.

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Definitions:

Collateral

Assets pledged by a borrower to secure a loan or credit, which can be seized by the lender if the borrower defaults.

Value

The importance, worth, or usefulness of something, often determined by its desirability, utility, or rarity.

UCC

A comprehensive set of laws governing commercial transactions in the United States, intended to harmonize the law of sales and other commercial transactions across jurisdictions.

Consideration

A fundamental concept in contract law that involves something of value exchanged between parties, serving as the reason or motive for entering into a contract.