Which of the Following Claims Concerning the Quality of Auditors

question 40

Multiple Choice

Which of the following claims concerning the quality of auditors' work would least likely result in civil liability for damages?

• A)Gross negligence amounting to constructive fraud.
• B)Failure to investigate possible fraud when other entities in the industry have experienced frauds.
• C)Reckless disregard of evidence that the financial statements do not conform to generally accepted accounting principles.
• D)Issuing an unqualified auditors' opinion when evidence suggests that the financial statements were not prepared according to generally accepted accounting principles.

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Definitions:

Free Entry

A market condition where firms can enter the industry without any barriers to entry, promoting competition.

Exit

In economic terms, the process of withdrawing from a market, ceasing operations, or ending an investment.

Committed Cost

Expenses that a company has already made or obliged itself to make in the future, often fixed and not easily changed.

Minimizing Loss

The strategy or process of taking actions to reduce the amount of money or resources being wasted or lost, especially in business or economic activities.