The "Continental Vending Machine" Court Decision Was a Landmark Ruling

question 16

Multiple Choice

The "Continental Vending Machine" court decision was a landmark ruling because:

• A) It authorized CPA firms to both prepare a client's financial statements and then audit these same financial statements
• B) It held that, for consistency, all financial statements must comply with GAAP, regardless of the industry in which a company operates
• C) Auditors can be held liable for misconduct, even if financial statements comply with GAAP
• D) Auditors may recoup from an audit client all of the litigation losses that the auditor sustains from certifying misleading financial statements if the audit client solely was responsible for the statement presentation being misleading

Understand the distinction between liability for personal injury and property damage.

Learn the essential elements required to establish an action in strict product liability.

Differentiate between the various basis of liability within product liability, including negligence, strict liability, and misrepresentation.

Comprehend the defenses available in product liability suits, such as product misuse and assumptions of risk.

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Definitions:

Personal Attribution

The process of attributing one's own behaviors or the behaviors of others to personal characteristics or dispositions.

Situational Attribution

The process of ascribing behavior to external factors, circumstances, or the environment.

Just World Hypothesis

The Just World Hypothesis is the belief that the world is a fair place and that people get what they deserve.

Conformity

The process of adjusting one's behavior or thinking to match those of other people or a group standard.