The Institute of Chartered Accountants in New Zealand (ICANZ) Proposed

question 12

Multiple Choice

The Institute of Chartered Accountants in New Zealand (ICANZ) proposed a policy of proportionate liability to replace the country's existing "joint and several liability" approach. Why was the proposal denied?

• A) Proportionate responsibility for damages cannot be determined objectively.
• B) Fairness to the defendants was not relevant to ensuring fairness to the injured party.
• C) Large auditing firms would be paying proportionately higher damage awards than small firms.
• D) Such a policy is inconsistent with harmonization of international auditing standards.

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