Which of the Following Provides the Broadest Standard for Holding

question 2

Multiple Choice

Which of the following provides the broadest standard for holding accountants liable to third parties for negligence?

• A) due diligence defense
• B) the foreseeability standard
• C) the Ultramares doctrine
• D) nolo contendere

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Definitions:

Equipment

Tangible property used in the operation of a business that is not intended for sale in the ordinary course of business.

Acquisition Differential

The disparity between the acquisition cost and the fair market value of the identifiable net assets obtained.

Cumulative Preferred Shares

Type of preferred stocks where dividends accumulate if not paid in a given year, and must be paid out before common stock dividends can resume.

Surplus (Deficit)

The financial position that results when total revenues exceed (surplus) or are less than (deficit) total expenses.