Can a Tax Partner in a CPA Firm with Multiple

question 10

Multiple Choice

Can a tax partner in a CPA firm with multiple offices be a "covered member" on an audit?

• A) Yes, but only if the partner renders more than 10 hours of tax services to an audit client
• B) Yes, if the tax partner works out of the same office as the audit partner in charge, even if she does not render any services to the audit client
• C) Yes, all partners in a CPA firm automatically are "covered members," even if they do not work out of the same office as the audit partner or render any services to the audit client
• D) No, tax partners are not subject to the independence rules

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Definitions:

Net Present Value Method

A financial analysis technique used to assess the profitability of an investment by calculating the difference between the present value of cash inflows and outflows.

Future Cash Inflows

Expected cash receipts or revenues generated from business activities in future periods.

Rate of Return

The gain or loss of an investment over a specified period, expressed as a percentage of the investment’s cost.

Internal Rate of Return

The metric used to estimate the profitability of potential investments, calculated as the discount rate that makes the net present value of all cash flows equal to zero.