D is corrent. A CPA’s duty of due care is guided by the following standards: (1) state and federal statutes, (2) court decisions, (3) contract with the client, (4) GAAS and GAAP, and (5) customs of the profession. Therefore, failure to follow GAAS constitutes a breach of a CPA’s duty of due care.
A is incorrect because the standard of due care requires the CPA to exercise the skill and judgment of an ordinary, prudent accountant. Inefficiency is not a failure to exercise due care.
B is incorrect because the standard of due care requires the CPA to exercise the skill and judgment of an ordinary, prudent accountant. An honest error of judgment or failure to provide money saving tax advice would not breach the duty of due care if the CPA acted in a reasonable manner.
C is incorrect because issuance of an oral rather than written report does not necessarily constitute a failure to exercise due care.
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