Which of the Following Statements Is True of Liability to Third

question 22

Multiple Choice

Which of the following statements is true of liability to third persons?

• A) Contract law has been widely used by third persons suffering damages as a result of an accountant's breach in the absence of special circumstances.
• B) At common law, recovery by a creditor was not permitted on the theory that the creditor was a third-party beneficiary of the contract employing the accountant.
• C) Common law required showing that the accountant was aware that the audit was ordered to satisfy the demand of a creditor or prospective creditor.
• D) Historically, third-party suits against accountants were generally permitted by the privity doctrine.

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Definitions:

Dependent Variable

The variable in an experiment or study that is expected to change as a result of variations in the independent variable.

Regression Analysis

A comprehensive statistical approach for modeling the relationship between a dependent variable and one or more independent variables, encompassing various techniques for analyzing and interpreting multiple data variables.

Residual Analysis

Residual analysis involves examining the residuals of a model (the differences between observed and predicted values) to assess the model's accuracy and assumptions.

Observed Values

The data or outcomes that are actually measured or collected in an experiment or survey.