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Threatened Litigation Is an Example of a Contingent Liability That

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Threatened litigation is an example of a contingent liability that must be considered in the concluding stages of the audit.


Definitions:

Self-Serving Bias

A cognitive bias where individuals attribute their successes to internal factors and their failures to external factors.

Fundamental Attribution Error

The cognitive bias that leads individuals to overemphasize personal traits and underestimate the influence of situational factors when explaining other people's behavior.

Halo Effect

The halo effect is a cognitive bias where an observer's overall impression of a person, company, or brand influences their feelings and thoughts about that entity's character or properties.

Distinctiveness

The quality or state of being easily distinguishable from others due to unique characteristics or features.

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