Tort Actions Against CPAs Are More Common Than Breach of Contract

question 9

Multiple Choice

Tort actions against CPAs are more common than breach of contract actions because

• A) there are more torts than contracts.
• B) the burden of proof is on the auditor rather than on the person suing.
• C) the person suing need prove only negligence.
• D) the amounts recoverable are normally larger.

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Definitions:

Total Utility

The complete fulfillment derived from the consumption of a specific amount of products or services.

Consumer Surplus

The gap between the total price consumers are willing and able to shell out for a good or service and the amount they really pay.

Water-Diamond Paradox

An economic paradox that questions why diamonds are pricier than water despite water being essential for survival and diamonds having relatively little practical use.

Marginal Utility

The extra pleasure or benefit a consumer receives from using an additional unit of a product or service.