In the Esanda Finance Corporation Ltd V Peat Hungerfords Case

question 86

Multiple Choice

In the Esanda Finance Corporation Ltd v Peat Hungerfords case, the court:

• A) confirmed the auditors' duties as stated in the Pacific Acceptance case.
• B) stated the auditors were aware of the intention of the third party's reliance on the audit report.
• C) stated auditors must undertake the audit with reasonable skill and care.
• D) all of the above

Describe the different ways an agency relationship can arise.

Recognize the effects of nondisclosure of agency on contractual obligations and liabilities.

Understand how agency relationships affect third-party contracts.

Grasp the significance of utmost good faith in agency agreements and the consequences of breach.

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Definitions:

Support Department Allocations

The process of distributing overhead costs from service departments to producing departments within a company.

Operating Income

Earnings generated from the core business operations, excluding expenses and revenues from non-operating activities.

Profit Margin

Profit margin is a financial ratio that measures the percentage of revenue remaining after all expenses have been deducted. It is a key indicator of a company's financial health and pricing strategy.

Return on Investment

A financial metric that calculates the profitability of an investment by dividing the net profit by the initial cost.