Class-Action Lawsuits. In the United States, it has become common to seek recovery offinancial losses from other parties, often even if that other party is not at fault. Frequently,this occurs by means of a class-action lawsuit.Required:a. What is a class-action lawsuit?b. What advantages does a class-action lawsuit have for the plaintiffs?c. What disadvantages does a class-action lawsuit have for the defendant?d. How has recent legislation affected class-action lawsuits?e. Perform an Internet search for information regarding class-action lawsuits against auditors. What are the (1) particulars of the lawsuit and (2) auditors’ defenses?

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Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.