A __________ Defect Occurs When,even Though the Product Is Manufactured

question 36

Multiple Choice

A __________ defect occurs when,even though the product is manufactured according to specifications,it is unreasonably dangerous to users.

• A) design
• B) contractor's
• C) manufacturing
• D) state of the art

Distinguish between different legal doctrines and rules (e.g., Ultramares rule, Restatement (Second) of Torts) that affect accountant liability.

Recognize the role of privity of contract and the impact of third-party users on accountant's liability.

Understand the implications of securities laws (e.g., Securities Act of 1933, Securities Exchange Act of 1934) on accountants' responsibilities and liabilities.

Recognize the penalties and defenses applicable to accountants under common law and federal securities laws.

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Definitions:

Benefits Principle

A theory in taxation stating that those who benefit from government services should pay taxes in proportion to the amount they benefit.

Government Services

Public programs and activities provided by the federal, state, and local governments to benefit their citizens.

Ability-To-Pay Principle

A taxation principle that suggests taxes should be levied according to an individual's or entity's capacity to pay, typically measured by income or wealth.

Taxes

Compulsory financial charges or some other type of levy imposed on a taxpayer by a governmental organization in order to fund government spending and various public expenditures.