If an Auditor Breaks a Contractual Obligation, Such as Failing

question 42

Multiple Choice

If an auditor breaks a contractual obligation, such as failing to complete an audit within the time frame specified in the engagement letter, what kind of liability does the auditor face?

• A) Criminal liability
• B) Civil liability
• C) Professional sanctions
• D) None of the above

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Definitions:

Nash Equilibria

A situation in a non-cooperative game where no player can benefit by changing strategies, assuming the other players also don't change their strategies.

Maximin Strategy

A decision rule in game theory that aims to maximize the minimum gain possible from a set of strategies.

Dominant Strategy

In game theory, a strategy that is best for a player, regardless of the strategies chosen by other players.

Nash Equilibria

A concept in game theory where no participant can gain by unilaterally changing their strategy if the strategies of others remain unchanged.