Sally Schultz,CPA,neglected to observe the taking of physical inventory when she audited Gordy Company.Inventory is material to the balance sheet.Schultz is most likely guilty of which of the following?
A)fraud.
B)scienter.
C)ordinary negligence.
D)gross negligence.

Question

Quizplus · Accepted Answer

Neglecting to observe the taking of physical inventory when auditing is an example of gross negligence, which is a severe form of negligence where there is a complete disregard for professional standards and reasonable care. It is considered a more serious error than ordinary negligence, which is a failure to exercise reasonable care and competence, but less severe than fraud, where there is a conscious intent to deceive.

Sally Schultz,CPA,neglected to Observe the Taking of Physical Inventory When