Near Privity Differs from Privity in That

question 62

Multiple Choice

Near privity differs from privity in that:

• A) The plaintiff has standing in cases where the wrongdoing is less severe than fraud.
• B) The auditor must know the plaintiff.
• C) The plaintiff must show that (s)he relied on the financial statements.
• D) All of the above.

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Definitions:

Salvage Value

The projected remaining worth of an asset after its lifespan has ended.

Net Operating Income

The profit a company makes from its core operations, excluding expenses and revenues from non-operating activities.

Payback Period

The length of time required to recover the original investment in a project or asset, based on its expected cash flows.

Required Rate

The minimum return that investors expect or the company specifies for an investment, project, or loan.