Which of the Following Would Not Need to Be Demonstrated

question 51

Multiple Choice

Which of the following would not need to be demonstrated by third parties bringing suit against auditors for losses sustained under the Securities Act of 1933?

• A)Auditors were aware of the materially misstated financial statements.
• B)Third-party purchasers suffered a loss.
• C)The client's financial statements contained a material misstatement.
• D)Purchasers would need to demonstrate all of the above.

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Definitions:

Kilos

A kilo or kilogram is a metric unit of mass equal to 1000 grams, used worldwide for measuring weight.

Fixed Manufacturing Overhead Rate

A constant charge used to allocate fixed overhead costs to products or services, regardless of production volume.

Standard Cost System

A cost accounting system that uses standard costs for inventory valuation and as a tool for cost control.

Budgeted Activity

Planned or expected levels of operational activity, which may include sales volume, production quantities, or labor hours, for budgeting purposes.