Refer to the Table

question 184

Multiple Choice

Refer to the table. The marginal product of the third unit of the resource is

• A)3.
• B)4.
• C)5.
• D)6.

Understand the legal liability of accountants and auditors in the professional practice.

Identify the conditions under which a CPA can be held liable for negligence, fraud, and scienter.

Distinguish between different legal doctrines and rules (e.g., Ultramares rule, Restatement (Second) of Torts) that affect accountant liability.

Recognize the role of privity of contract and the impact of third-party users on accountant's liability.

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Definitions:

Work Product

Documents, materials, or information prepared by or for attorneys in anticipation of litigation, protected from disclosure.

Attorney-Client Privilege

A legal principle that keeps communications between a lawyer and their client confidential, encouraging open and honest discourse.

Years

Units of time equal to 365 or 366 days, used in measuring durations and intervals.

Work Product Doctrine

A legal principle that protects materials prepared by an attorney in the course of legal representation from being disclosed in litigation.