When performing an audit, a CPA will most likely be considered negligent when the CPA fails to

a. Detect all of a client’s fraudulent activities.

b. Include a negligence disclaimer in the client engagement letter.

c. Warn a client of known internal control weaknesses.

d. Warn a client’s customers of embezzlement by the client’s employees.

Items 10 through 13 are based on the following:

Edgar, CPA, reviewed the financial statements of Yoke Company (a nonissuer company). In performing the review Edgar failed to discover that a supplier had been overbilling Yoke for purchases for a number of years. Yoke filed a lawsuit against Edgar for negligence in performing the review.