When Shareholders Use Audited Statements as the Basis for Their

question 29

True/False

When shareholders use audited statements as the basis for their investment decisions,court-imposed policy has shaped the law to consider this use outside the intended statutory purpose of the audit.In so doing,the courts have allowed the professional to be released from any duty of care to these individuals for any investment losses incurred as a result of reliance on the audit.

---

Definitions:

Risk-Taking

The act of undertaking actions or making decisions that involve the possibility of facing undesirable outcomes.

Entrepreneurship

The activity of setting up a business or businesses, taking on financial risks in the hope of profit, characterized by innovation, strategy, and risk-taking.

Work Teams

Groups of employees who collaborate closely to achieve shared goals or complete projects.

Diverse Group

A group consisting of individuals from various backgrounds, cultures, experiences, and perspectives.