Judge Blue Is Evaluating a Case of Professional Negligence Involving

question 18

Multiple Choice

Judge Blue is evaluating a case of professional negligence involving a claim against an auditor.Where will Judge Blue look to determine what the ordinary standard of care is for the auditing profession?

• A)The auditing industry,in particular the Generally Accepted Auditing Standards (GAAS)and any other standards the industry has implemented.
• B)The United States Department of Labor.
• C)The Secretary of State office in the state where the business is incorporated.
• D)The shareholders of the corporation in questioned.

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Definitions:

Fixed Assets

Fixed assets are long-term tangible assets used in a company's operations, such as buildings, machinery, and equipment, which are not expected to be converted into cash in the short term.

Shares of Stock

Represent the units of ownership interest in a corporation or financial asset that investors buy and sell.

Inventory

The total amount of goods or materials held by a company, intended for sale or manufacturing into final products.

Cash Ratio

A financial metric assessing a firm's capability to meet its current obligations using its available cash and near-cash assets.