The Foreseen Third-Party Rule States

question 12

Multiple Choice

The foreseen third-party rule states:

• A) Auditors can be held liable for damages to plaintiffs even if they are not known to the auditor.
• B) The auditor is liable to third parties not normally having privity.
• C) The plaintiff does not have to show standing.
• D) Both a and b.

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Definitions:

Degrees of Freedom

The number of independent pieces of information available to estimate another piece of information or the parameters in a statistical model.

Mean

The average value of a set of numbers, obtained by dividing the sum of all the numbers by the count of numbers.

Percentile Points

Points or values below which a certain percentage of observations in a dataset fall, used to measure the relative standing of a value within a dataset.

F Distribution

A probability distribution that arises in the analysis of variance and is used in hypothesis testing and confidence interval estimation for two sample variances.