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:

Industry Supply

The total quantity of a good or service that producers in an industry are willing and able to sell at different price levels.

Firm's Output

The total quantity of goods and services produced by a company over a particular period.

Perfectly Inelastic Supply Curve

A perfectly vertical supply curve; quantity supplied remains constant no matter what happens to price.

Elastic

A characteristic of a good or service with a demand or supply that significantly changes in response to price changes.