A Principle That May Reduce or Entirely Eliminate Auditor Liability

question 56

Multiple Choice

A principle that may reduce or entirely eliminate auditor liability to a client is:

• A)Client constructive negligence.
• B)Client contributory negligence.
• C)Auditor ordinary negligence.
• D)Auditor gross negligence.

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Definitions:

Average Tax Rate

The ratio of the total amount of taxes paid to the total tax base (taxable income or spending), often expressed as a percentage.

Total Income

The sum of all wages, salaries, profits, interest payments, rents, and other forms of earnings received by individuals or entities within a specified period.

Average Tax Rate

The proportion of total income that is paid in taxes, calculated by dividing the total amount of taxes paid by the taxpayer's total income.

Marginal Tax Rate

The rate at which the last dollar of income is taxed, indicating how much tax will be paid on an additional dollar of income.