When a substantial error is found in a tax return, which option is NOT a preferred action for a CPA?

The correct choice is to highlight that attempting to fix the return without informing anyone is not a preferred action for a CPA. Ethical guidelines emphasize the importance of transparency and communication in the accounting profession. When a substantial error is discovered in a tax return, the CPA has a responsibility to inform the client about the error. This ensures that the client is aware of the situation and can make informed decisions moving forward.

Additionally, filing an amended return to correct the issue is a critical and ethical step in rectifying the mistake, demonstrating the CPA’s commitment to integrity and accuracy. Consulting with tax authorities may also be necessary in some situations, depending on the nature and implications of the error.

In contrast, attempting to correct the return without informing anyone violates the ethical standards of accountability and professional conduct that govern the actions of CPAs. This approach can lead to further complications, including potential penalties for both the CPA and the client, and undermines the trust that is essential in the client-CPA relationship.