In Third Party Suits, When There Is a Misstatement in the Financial

question 11

Multiple Choice

In third party suits, when there is a misstatement in the financial statements, which of the auditor's defences usually means non-reliance on the financial statements by the user?

• A) lack of duty
• B) non-negligent performance
• C) contributory negligence
• D) absence of causal connections

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Definitions:

Payrolls

The total amount of money a company pays to its employees for a set period of time, including wages, salaries, bonuses, and deductions.

Fully Funded Pension Rights

A pension plan that has enough assets to meet all its obligations to retirees and current employees.

Pension Expense

The cost recognized by an employer for contributions to pension plans on behalf of its employees for the current period.

Salaries Expense

An account that represents the total amount paid to employees for services rendered during a specific period, usually before any deductions.