If an Audit Firm Is Being Sued by a Third

question 19

Multiple Choice

If an audit firm is being sued by a third party for common-law fraud based upon a materially false financial report, which of the following is the best defence which the auditors could assert?

• A) Lack of a contractual relationship.
• B) Contributory negligence on the part of the client.
• C) Disclaimer contained in the engagement letter.
• D) Lack of causation.

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Definitions:

Purple Bar

A graphical element or user interface feature that is distinguished by a purple color, specifics depend on the application.

Seven-day Week

A time measurement system used worldwide, consisting of seven consecutive days.

Display

The visual output device of a computer or other electronic device, used for showing text, graphics, or video content.

Schedule

A plan for carrying out processes or events, specifying times and resources.