A Rule That Says That an Accountant Is Liable for Negligence

question 10

Multiple Choice

A rule that says that an accountant is liable for negligence to third parties who are foreseeable users of the client's financial statements is known as ________.

• A)the foreseeability standard
• B)the Ultramares doctrine
• C)the due diligence defense
• D)Section 552 of the Restatement (Second)of Torts

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Definitions:

Modest Dividend

A relatively small or conservative amount paid out to shareholders from a company's earnings.

Implied Constant Growth

A concept in financial modeling that assumes a company or economy will continue to grow at a consistent rate indefinitely, impacting valuation methods.

Kyocera

A multinational corporation based in Japan, specializing in ceramic and electronic products.

Last Dividend

The most recent distribution of profits made by a corporation to its shareholders.