PA Was Engaged by Microcomputer Distributor Limited (MDL)to Conduct a Review

question 2

Multiple Choice

PA was engaged by Microcomputer Distributor Limited (MDL) to conduct a review engagement.The financial statements are used primarily by the shareholders,management,and by the bank.Recently,an employee was fired for stealing computer parts,primarily chips and boards that could easily be placed in a pocket.MDL is suing PA because they believed that audit procedures,such as counting inventory,would have detected this fraud.What is PA's best defence?

• A)absence of causal connection
• B)lack of negligence
• C)contributory negligence
• D)duty of care not required

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Definitions:

Narcissism

A personality trait characterized by an inflated self-image, a deep need for admiration, and a lack of empathy for others.

Foolish Conformity

The act of adopting behaviors or beliefs uncritically or irrationally, often to align with a group's norms or expectations.

Affiliation Needs

The human need to form and maintain strong, stable interpersonal relationships and social connections.

Safety

The state of being safe from or not prone to causing harm, risk, or damage.