Question

3 The CPA prepares a tax return for a client. The client is in a partnership that pulls a specialized TEFRA audit for this partnership. The partnership has poor records and the CPA did not prepare the partnership's tax return. The potential for restatement of income is high. What is the best course of action?

a The CPA is obligated to handle the partnership audit.

b The client should be advised engage a tax attorney to handle the partnership audit.

c The CPA cannot handle the partnership audit due to conflict of interest.

d None of the above.

8 A CPA cannot do which of the following for an audit client?

a Temporarily fill in as CFO during a family leave for the CFO

b Valuation on the audited company for a divorce matter for an executive

c Assignment to design and implement an ERP system

d All of the above

10 As a new CPA, you are asked to bid on an audit of an ESOP plan. In order to be in the conformity with the due care principle, what question should the CPA ask themself(ves)?

a Is your experience, education and judgment adequate for the responsibilities assumed?

b Are you independent with respect to the client?

c Does the company have an adverse interest in the ESOP?

d All of the above

Answer 1

3 b there is a conflict of interest since the CPA has prepared the tax return of client biasness can cause harm if he prepares return for partnership as well

8 d CPA can not do all above

10 d CPA should possess the above qualities

multiple questions being posted in a space for single question