Which Theory of Auditing Focuses More Towards the Decision Usefulness

question 25

Multiple Choice

Which theory of auditing focuses more towards the decision usefulness role of accounting?

• A)Insurance hypothesis.
• B)Agency theory.
• C)Information hypothesis.
• D)None of the above.

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Definitions:

Market Equilibrium

A market state where the quantity supplied equals the quantity demanded, leading to a balance in price and volume.

Interest Rate

The cost of borrowing money expressed as a percentage of the total amount borrowed.

Nominal Interest Rates

are the stated interest rates unadjusted for inflation, representing the actual current cost of borrowing or the raw yield on savings.

Central Bank Policies

Refers to the actions and strategies employed by a nation's central bank to control the money supply, manage inflation, and stabilize the currency.