When performing an audit, a CPA:

Question

Quizplus · Accepted Answer

A CPA must exercise the level of care, skill, and judgment expected of a reasonably prudent CPA under the circumstances. This is known as the standard of due professional care and is required by auditing standards. The other choices are incorrect – B is incorrect because while compliance with GAAP is important, a CPA must also follow auditing standards, C is incorrect because while a CPA has a responsibility to detect material misstatements due to fraud, they are not strictly liable for client fraud, and D is incorrect because a CPA can be held liable for negligence or failure to follow auditing standards, even if they did not intend to do harm.

When Performing an Audit, a CPA