Which of the Following Auditor's Defenses Usually Means Nonreliance on the Financial

question 96

Multiple Choice

Which of the following auditor's defenses usually means nonreliance on the financial statements by the user?

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

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Definitions:

Fair Market Value

The price that an asset would sell for on the open market between willing and knowledgeable parties.

Book Value

The net value of a company's assets as recorded on its balance sheet, calculated as total assets minus intangible assets (patents, goodwill) and liabilities.

Convertible Bonds

Bonds that can be converted into a predetermined amount of the company's equity at certain times during its life, usually at the discretion of the bondholder.

Outstanding Voting Shares

The total shares of a company that are held by shareholders and carry rights to vote on company matters.