Question

Mike is a CPA. For the past 5 years, the information that Anne provided Mike to prepare her return included a Schedule K-1 from a partnership showing significant income. However, Mike did not see a Schedule K-1 from the partnership among the information Anne provided to him this year. What does due diligence require Mike to do?

Answer 1

Answer:

According to the given scenario, Mike needs to ask Anne that she did not provide him with a Schedule K-1. Because the law does not allow Mike to rely on the inadequate information that is provided to him nor he should make a list on his own with the help of the estimated amount. Therefore, a CPA must have first-hand information from the concerned person before performing any task.