Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN: 9781337619455
Author: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 4, Problem 8CYBK
To determine
Audit firm litigation:
An audit firm may face litigations for its failure in an audit engagement. Most of the audit litigations occur at the time of failure of business or detection of company frauds by the third party.
To choose: the correct option.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Generally, the auditor could be legally liable under?
Select one:
a. contract law but not under the tort of negligence to third parties
b. the tort of negligence to the client and contract law
c. the tort of negligence but not contract law to the client
d. contract law to third parties and to the client
3.An important development in the area of breach of contract by an auditor is contributory negligence.Required:Define contributory negligence. Discuss the concept of contributory negligence as it applies to auditing using the example of the AWA case.
Compare and contrast auditor liability under contract law vs. tort law.
Chapter 4 Solutions
Auditing: A Risk Based-Approach (MindTap Course List)
Ch. 4 - Prob. 1CYBKCh. 4 - Prob. 2CYBKCh. 4 - Prob. 3CYBKCh. 4 - Prob. 4CYBKCh. 4 - Prob. 5CYBKCh. 4 - Prob. 6CYBKCh. 4 - Prob. 7CYBKCh. 4 - Prob. 8CYBKCh. 4 - Prob. 9CYBKCh. 4 - Prob. 10CYBK
Ch. 4 - Prob. 11CYBKCh. 4 - Prob. 12CYBKCh. 4 - Prob. 1RQSCCh. 4 - Prob. 2RQSCCh. 4 - Prob. 3RQSCCh. 4 - Prob. 4RQSCCh. 4 - Prob. 5RQSCCh. 4 - Prob. 6RQSCCh. 4 - Refer to the Focus on Fraud feature “Moss Adams...Ch. 4 - Prob. 8RQSCCh. 4 - Prob. 9RQSCCh. 4 - Prob. 10RQSCCh. 4 - Prob. 11RQSCCh. 4 - Prob. 12RQSCCh. 4 - Prob. 13RQSCCh. 4 - Prob. 14RQSCCh. 4 - Prob. 15RQSCCh. 4 - Prob. 16RQSCCh. 4 - Prob. 17RQSCCh. 4 - Prob. 18RQSCCh. 4 - Prob. 19RQSCCh. 4 - Prob. 20RQSCCh. 4 - Prob. 21RQSCCh. 4 - Able Corporation decided to make a public offering...Ch. 4 - KPMG (LO 1, 2, 3) KPMG LLP served as the external...Ch. 4 - ToshIba, EY (LO 1, 2, 3) In 2015, the business...
Knowledge Booster
Similar questions
- Explain the role of Anticipatory Breach of Contract in non-performance of contract. Briefly state and analyze the provisions of Contract Act dealing with Anticipatory Breach of Contract. Support your answer with suitable case study/ case scenario.arrow_forwardDo you think that the provision of nonaudit services for a client with a failed audit is evidence of negligence? Explain.arrow_forwardA lack of reasonable care that may be characterized by the failure of auditors to followGAAS in the conduct of the audit is known asa. Constructive fraud.b. Fraud.c. Gross negligence.d. Ordinary negligencearrow_forward
- he factor that distinguishes an error from fraud or other irregularities is A) materiality. B) intent. C) whether it is a rand amount or a process. D) whether it is caused by the auditor or the client.arrow_forwardExplain the auditor legal liability, this includes what law that procure such liability?arrow_forwardWhat are the differences between business failure, auditor failure, and audit risk? Is it fair to hold an auditing firm liable for any of these types of failures?arrow_forward
- Which of the following statements is correct with regards to the auditor's responsibility concerning fraud? a.Fraud detection is the objective of an audit. b.It is the auditor's responsibility to prevent fraud. c.The auditor is responsible for obtaining reasonable assurance that the financial statements are free from material statement, whether caused by fraud or error. d.When fraud is discovered by the auditor they must withdraw from the engagement.arrow_forwardDistinguish between the legal concepts of actually foreseen third-party users and reasonably foreseeable third-party users. How does each concept establish a basis for an auditor’s legal liability to third parties?arrow_forwardWhat is the primary difference between fraud and error infinancial statement reporting?a. The materiality of the misstatement.b. The intent to deceive.c. The level of management involved.d. The type of transaction effected.arrow_forward
- 28. The engagement letter represents the written contract for the engagement, and its primary objective is to prevent possible misunderstandings between the client and the auditorsSelect one:TrueFalsearrow_forwarda.) Identify the purposes or applications of the Statute of Frauds.A purpose of the Statute of Frauds is to ensure that contracts formed for fraudulent purposes are preserved in writingb.)outline the penalties for committing fraud in certain kinds of contractsc.)enforce the full execution of oral contractsd.)prevent one party from falsely claiming that a contract was formed in certain areas of exchangearrow_forwardWhich of the following statements best describes auditors’ responsibility for detecting a client’s noncompliance with a law or regulation?a. The responsibility for detecting noncompliance exactly parallels the responsibility for errors and fraud.b. Auditors must design tests to detect all material noncompliance that indirectly affects the financial statements.c. Auditors must design tests to obtain reasonable assurance that all noncompliance with direct material financial statement effects is detected.d. Auditors must design tests to detect all noncompliance that directly affects the financial statements.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage LearningBusiness Its Legal Ethical & Global EnvironmentAccountingISBN:9781305224414Author:JENNINGSPublisher:Cengage
- Auditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College Pub
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning
Business Its Legal Ethical & Global Environment
Accounting
ISBN:9781305224414
Author:JENNINGS
Publisher:Cengage
Auditing: A Risk Based-Approach to Conducting a Q...
Accounting
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:South-Western College Pub