If a CPA recklessly departs from the standards of due care when conducting an audit, the CPA will be liable to third parties who are unknown to the CPA based on
A. Gross negligence.
B. Criminal deceit.
C. Negligence.
D. Strict liability.
Answer: A
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Which of the following ratios is the best measure of liquidity?
a. Earnings per share b. Current ratio c. Return on assets ratio d. Cash flow from operations to capital expenditures ratio
The term "preferred" comes from the fact that preferred shareholders receive all past (if cumulative) and present dividends before common shareholders can receive any cash dividends—in other words,
their dividend claims are preferred over common stock dividend claims. Indicate whether the statement is true or false.
Posting references are part of the audit trail.
Answer the following statement true (T) or false (F)
________ consider proposed fixed-asset outlays, research and development activities, marketing and product development actions, capital structure, and major sources of financing.
A) Short-term financial plans B) Long-term financial plans C) Pro forma statements D) Cash budgeting