Which of the Following Is an Illustration of Liability to Clients

question 99

Multiple Choice

Which of the following is an illustration of liability to clients under common law?

• A)Client sues auditor for not discovering a theft of assets by an employee.
• B)Bank sues auditor for not discovering that borrower's financial statements are misstated.
• C)Combined group of stockholders sue auditor for not discovering materially misstated financial statements.
• D)The federal government prosecutes the auditor for knowingly issuing an incorrect audit report.

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Definitions:

Confidence

The feeling or belief that one can rely on someone or something; self-assurance.

Compromising

A conflict resolution strategy where both parties give up something of value to reach an agreement.

Political Tactic

Strategies employed by individuals or groups within an organization to gain power, influence decisions, and achieve specific goals.

Withholds Information

The act of intentionally not sharing or disclosing relevant data or insights that may be necessary or beneficial to others.