Auditors in the United States May Form Limited Liability Partnerships

question 18

Multiple Choice

Auditors in the United States may form limited liability partnerships. What does this mean for civil liability of auditors?

• A) It allows negligent auditors to escape civil litigation for their failures.
• B) Auditors are limited to serving clients that agree not to pursue litigation for audit negligence.
• C) The personal wealth of partners who are not negligent is protected from litigation against the audit firm.
• D) It has no impact on civil liability because it provides limitations only on criminal liability.

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Definitions:

Available-For-Sale Securities

Debt and equity securities not classified as held-to-maturity or trading securities, recorded at fair value in balance sheets.