In Third- Party Suits, Which of the Auditor's Defences Contends

question 72

Multiple Choice

In third- party suits, which of the auditor's defences contends lack of privity of contract?

• A) Lack of duty
• B) Absence of causal connections
• C) Non- negligent performance
• D) Contributory negligence

Assess cost-benefit scenarios in business operations.

Apply principles of economics to personal financial decisions.

Understand the factors influencing cost-effectiveness in production and pricing strategies.

Understand the concept of Net Present Value (NPV) and its calculation.

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Definitions:

Inventory Turnover

Inventory turnover is a ratio indicating how many times a company has sold and replaced inventory over a certain period, helping to measure the efficiency of inventory management.

Net Income

The total profit of a company after all expenses, taxes, and deductions have been subtracted from total revenue.

Balance Sheet

A financial statement that provides a snapshot of a company's financial condition at a specific time, showing assets, liabilities, and shareholder equity.

Vertical Integration

A method by which a firm broadens its activities to cover multiple points within its production sequence, like when a manufacturing entity possesses its supplier and/or distribution channels.