The Ultramares Case Established the Initial Precedent That Auditors' Liability

question 6

True/False

The Ultramares case established the initial precedent that auditors' liability for ordinary negligence is limited to those who are in privity of contract.

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Definitions:

Expenses

Outflows of resources or incurring of liabilities from a company's operations, including costs for materials, labor, and overhead required to generate revenue.

GAAP

Generally Accepted Accounting Principles, which are a standardized set of accounting rules, procedures, and conventions for reporting financial information.

IFRS

International Financial Reporting Standards are worldwide guidelines for accounting, utilized in the creation of financial statements.

Depreciation

Apportioning the cost of a tangible asset in a systematic way over its period of usefulness.