The Key Element That Protects an Auditor Against Common Law

question 28

Multiple Choice

The key element that protects an auditor against common law liability is:

• A) Adherence to generally accepted accounting principles (GAAP)
• B) Adherence to generally accepted auditing standards (GAAS)
• C) Compliance with threats and safeguards approach
• D) Maintain confidentiality of client information

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Definitions:

Market Value

The existing rate at which a service or asset might be sold or acquired in the market.

Interest Rate

The share of a loan attributed as interest to the borrower, commonly expressed as an annual rate of the outstanding loan amount.

Present Discounted Value

The current value of a future sum of money or stream of cash flows given a specified rate of return.

Interest Rate

The percentage at which interest is paid by borrowers for the use of money they borrow from a lender, or earned by depositors for funds deposited in a bank account.