Which of the Following Is Not Required for Establishing an Auditor's

question 16

Multiple Choice

Which of the following is not required for establishing an auditor's liability for negligence?

• A)An undetected material misstatement.
• B)Failure to exercise due care.
• C)A connection between the auditor's negligence and a plaintiff's loss.
• D)A duty to conform to a standard of care.

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Definitions:

Long-term Investment

Investments held for an extended period, typically exceeding one year, with the intention of achieving higher returns over time.

Held-to-maturity Security

A debt security that a company has the intent and ability to hold until its maturity date, recorded at amortized cost.

Semiannual Interest

Interest that is calculated and paid twice a year on an investment or loan.

Consolidation Method

An accounting technique used by firms to combine the financial statements of subsidiaries with those of the parent company to present as one entity.