According to Circular 230, What Should a CPA Do Upon

question 60

Multiple Choice

According to Circular 230, what should a CPA do upon discovery of an error in a client's prior-year return?

• A)Notify the IRS of the error.
• B)Inform the client of the error and its tax consequences.
• C)File an amended return for the client.
• D)Do nothing.

---

Definitions:

Equilibrium Output

The level of output at which the quantity of goods produced equals the quantity of goods consumed, often resulting in market stability.

Short-Run Aggregate Demand

The total amount of goods and services that will be purchased at all possible price levels in an economy in a short period.

Aggregate Supply Curve

A graphical representation showing the relationship between the overall price level in an economy and the total output produced by firms.

Long-Run Equilibrium

A state in which supply and demand are balanced over the long term, typically characterized by full employment of resources and stable prices.