Question
Please answer the following multiple questions: Timor, a CPA, performed an audit for TriMoran Corporation. Timor also performed an S-1 review to review events subsequent
Please answer the following multiple questions:
- Timor, a CPA, performed an audit for TriMoran Corporation. Timor also performed an S-1 review to review events subsequent to the balance sheet date. If Timor fails to further investigate suspicious facts, under which of these can he be found negligent?
A. The audit but not the review
B. Both the audit and the review
C. The review but not the audit
D. Neither the audit nor the review
2. Trout, CPA, reviewed the financial statements of Farley Company (a nonpublic company). In performing the review, Trout failed to discover that a supplier had been overbilling Farley for purchases for a number of years. Farley filed a lawsuit against Trout for negligence in performing the review. What would be essential to proving Farleys case against Trout?
A. Ordinary negligence in the performance of the review
B. Reckless disregard for professional standards
C. Gross negligence in the performance of the review
D. Failure to adhere to generally accepted auditing standards
3. A practitioner is in violation of Circular 230 if the practitioner does which of the following?
A. Publishes the availability of a written schedule of fees containing hourly rates.
B. Informs a client of the possible penalties that may apply to a position taken on a tax return.
C. Charges a contingent fee for filing an original tax return.
D. Relies, without verification, on information furnished by the client.
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