[SA2016]

Here is the question:

A former client of Aaron Derek, CPA, filed a lawsuit in state court alleging that Aaron failed to exercise due care in the performance of tax and compilation services performed in 2011. Aaron firmly believes that he performed his services with competence and diligence. In his defense, he plans to admit to making one minor error which he says was inadvertent and did not have a material effect on the client’s taxes or financial position. In light of his admission, has Aaron complied with the AICPA Code’s standard of due care and why?

A. No. He obviously did not discharge his professional responsibilities with competence and diligence.

B. No. He did not perform professional services to the best of his abilities.

C. Yes. He has chosen to be honest in reporting that he made an error.

D. Yes. The AICPA standard for due care does not require CPAs to be infallible.

This one is tricky. Okay so I fell it is D, but it throws in does not require. I know we are not infallible. Then C it says he did be honest. What does it matter if a CPA is honest about making a mistake? I don’t think changes any thing. So I think D is correct. I’m having trouble with the word infallible-incapable of making mistakes.

So does D mean due care does not require CPA to be incapable of making mistakes? The wording is hard for me to understand. We can make mistakes.

[ruggercpa2b]

I looked up the definition of infallable and it means incapable of making a mistake. Which this is not necessarily true. CPAs are capable of making mistakes and as long as they performed their work with professional due care then they cannot be held accountable for mistakes that may have occurred. Which makes D the most correct answer.

Also, can you post your questions in the Audit Forum. That way they do not get lost as other people's posts pop up. Also, other people studying for Audit can help explain concepts you may be having trouble with.

AUD - NINJA in Training
BEC - NINJA in Training
FAR - NINJA in Training
REG - NINJA in Training

AUD - 1/6/18
FAR - TBD
REG - TBD
BEC - TBD

AUD - 73, 72 retake 7/2/2016
BEC - 8/20/2016
REG - TBD
FAR - TBD

I am so ready for this nightmare to be over. Been at this way too long.

[Author]

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