A CPA Firm Notifies Their Audit Client of a Material

question 41

True/False

A CPA firm notifies their audit client of a material weakness in internal controls in the warehouse storing inventories. Subsequently, the client discovers a large theft of inventory in the warehouse. In this case, the CPA firm would have the defense of contributor negligence.

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Definitions:

Hazardous Chemicals

Substances that pose a risk to health, safety, or the environment, requiring careful handling, storage, and disposal to prevent harm.

Sewing Machines

Mechanical or electronic devices used to stitch fabric or other materials together.

Trade Deficit

A situation where a country's imports exceed its exports during a specific period, leading to a net outflow of domestic currency to foreign markets.

Net Exports

The value of a country's total exports minus its total imports; a measure of a nation's foreign trade balance.