As Set Forth in the Case in the Text, Bily

question 47

Multiple Choice

As set forth in the case in the text, Bily v. Arthur Young & Co., which of the following is true regarding auditor liability to third parties under the Restatement rule?

• A) An auditor retained to conduct an annual audit and to furnish an opinion for no particular purpose generally undertakes no duty to third parties.
• B) An auditor retained to conduct an annual audit and to furnish an opinion for no particular purpose does undertake a duty to any foreseeable third-party users.
• C) An auditor retained to conduct an annual audit and to furnish an opinion for no particular purpose undertakes a duty only to third parties who are financial institutions.
• D) An auditor retained to conduct an annual audit and to furnish an opinion for no particular purpose generally undertakes a duty only to directors of the company who provide loans to the company.
• E) An auditor retained to conduct an annual audit and to furnish an opinion for no particular purpose generally undertakes no duty to third parties except for financial institutions and also directors who provide loans to a company.

Calculate the sum of observations given the sample size and mean.

Understand the impact of skewness on the mean, median, and mode.

Differentiate between measures of central tendency and measures of variability.

Identify the conditions under which the mean, median, and mode are equal.

---

Definitions:

Proportional

Characterized by a constant relationship in degree or number between two variables.

Average Tax Rate

The proportion of total income that is paid as tax, calculated by dividing the total amount of tax paid by the total income.

Personal Income

The total amount of income earned by individuals from all sources, including wages, dividends, and interest, before taxes.

Tax Incidence

The analysis of the effect of a particular tax on the distribution of economic welfare among stakeholders.