Management Failed to Put in a System of Adequate Internal

question 7

Multiple Choice

Management failed to put in a system of adequate internal controls. The public accounting firm uncovered the weakness, but did not report it to the Board members of the company. What kind of liability, if any, would the auditors be exposed to?

• A) breach of contract
• B) contributory negligence
• C) a and b
• D) no liability

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Definitions:

Cosmetics Company

A business specializing in the production and sale of beauty and personal care products, such as makeup, skincare, and fragrances.

Prospecting Method

Techniques or strategies used to identify potential customers or clients for a business, aiming to initiate and establish new business opportunities.

E-mail Marketing

A technique of sending commercial messages to a group of people using electronic mail, aimed at promoting products or services.

Potential Contacts

Individuals or entities that could possibly be converted into clients or customers, identified through research or networking as having an interest or need for a product or service.