The Decision in the Caparo Case (1990) Reduced the Duty

question 32

Multiple Choice

The decision in the Caparo case (1990) reduced the duty of care of auditors to:

• A) all users known to the auditor.
• B) all users that ought reasonably to have been known to the auditor.
• C) the shareholders as a group.
• D) all users of the financial statements, except for investors.

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Definitions:

Exchange Rate

The price at which one currency can be exchanged for another currency.

Third Currency

A currency used as an intermediary for trading between two currencies that are not directly exchangeable.

Law of One Price

An economic theory that suggests the price of an identical good will have the same price globally, assuming no transportation costs and no differential taxes.

Canadian Dollars

The currency of Canada, symbolized as CAD and denoted by the sign $.