What does due diligence mean on the CPA exam?
Due diligence. The specific inquiry, documentation and record-keeping a preparer must perform before claiming certain credits or head-of-household status. Failing it carries a penalty per return, per credit.
Defined against Sec. 6695(g).
Which CPA exam sections use due diligence?
Due diligence appears in the REG section of the CPA exam.
Related terms
- segregation of duties: Splitting a sensitive process so no one person can both commit and conceal an error or fraud.
- audit procedures: The specific work performed: inspection, observation, inquiry, confirmation, recalculation, reperformance and analytical procedures.
- accumulated earnings and profits: The C corporation earnings and profits an S corporation carries into S status.
- reasonable basis: The lowest standard at which a return position may be taken without penalty if it is disclosed.