A Principle That May Reduce or Eliminates Auditors' Liability to Clients

question 20

Multiple Choice

A principle that may reduce or eliminates auditors' liability to clients is

• A) client's constructive negligence.
• B) client's contributory negligence.
• C) auditors' ordinary negligence.
• D) auditors' gross negligence.

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Definitions:

Salad Dressing

A mixture of ingredients like oil, vinegar, herbs, and seasonings applied to salads to enhance their flavor.

Quarter's Profit

The net income or earnings generated by a company during a specific quarter of its fiscal year.

Partnership

An authorized commercial operation formed by two or more participants who equally handle management duties and share the profits.

Reinsure

A practice where an insurance company transfers a portion of potential risk to another insurer to reduce its overall liability.