Regarding proper ethical guidelines, which (if any) of the following is correct?
a. The use of client estimates in preparing a return may be acceptable.
b. Under no circumstances should a question on a tax return be left unanswered.
c. If a client has made a mistake in a prior year's return and refuses to correct it, you should withdraw from the engagement.
d. If the exact amount of a deduction is not certain (e.g., around mid-$600s), it should be recorded as an odd amount (i.e., $649) so as to increase the appearance of greater certainty.
e. None of these.
a
RATIONALE: In some cases, the use of client estimates is acceptable (choice a.), but they should not give the appearance of certainty (choice d.). Questions can be left blank if their meaning is uncertain or the answer is not readily available or voluminous (choice b.). Withdrawal is not necessary if the error is not material or does not have a carryover effect on the current year return (choice c.).
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