Which of the Following Statements Is True of Negligence by an Accountant

question 46

Multiple Choice

Which of the following statements is true of negligence by an accountant?

• A) The failure of an accountant to discover fraud by the client's employees or others is in itself proof of negligence by the accountant.
• B) The investigative techniques used by accountants will always uncover the fraud of a skillful and careful crook.
• C) The traditional defenses of contributory negligence and comparative negligence can apply in a negligence action against an accountant.
• D) It is not necessary to notify an appropriate person in management if an accountant has a basis for suspicion of fraud.

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Definitions:

Vertical Specialization

Vertical specialization refers to the degree to which tasks within an organization are subdivided into separate jobs.

Mechanistic

Describes organizational structures or systems that are highly formal, centralized, and governed by strict procedures and hierarchies.

Organic

Characterizing organizations or systems that are flexible, adaptive, and decentralized in nature.

Horizontal Specialization

Refers to the division of labor where tasks are subdivided into smaller, specialized tasks across a horizontal plane within an organization.