Which of the Following Is Not a Valid Defense for Auditors

question 23

Multiple Choice

Which of the following is not a valid defense for auditors' liability to third parties for ordinary negligence under common law?

• A)The loss was caused by factors other than the materially misstated financial statements
• B)Lack of proper standing (relationship)to bring suit in that jurisdiction.
• C)Lack of a privity relationship with auditors
• D)Third parties did not rely upon the financial statements

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Definitions:

Marginal Output

The additional output that results from increasing the production input by one unit.

Total Output

The total value of all goods and services produced in an economy during a specific period.

Workers

Individuals engaged in any form of employment, contributing labor for the production of goods and services.

ATC

Average Total Cost, a term in economics that refers to the total cost per unit of output, calculated by dividing the total cost by the quantity of output produced.