The paramount onus of an auditing professional is conveying reliable information to clients and the public so that they may make imperative, intellectual decisions. For this obligation to be fulfilled, a quality audit must be performed in accordance with generally accepted auditing standards (GAAS). Executing a quality audit necessitates an auditor reasonably assures financial statements are presented fairly in accordance with generally accepted accounting principles (GAAP) and not materially misstated, whether due to errors or fraud. Furthermore, executing a quality audit obliges an auditor to utilize professional skepticism by exercising proficient judgment and proves competency in accounting principles and professional auditing standards.
…show more content…
Comparably, displeased investors who purchased Cardozo & Co.’s shares on the date of the IPO, as well as those who purchased shares in anticipation of the propositioned merger, have filed a private lawsuit against me. To conclude this chronicle of calamitous events, I have been made aware that Cardozo & Co. is under investigation by the United States Department of Justice (DOJ), the Internal Revenue Service (IRS), the Securities Exchange Commission (SEC), the Florida Attorney General, and the Florida Department of Revenue. I must now, as a result of my actions, ask myself: Am I, in any manner, liable under common law? Am I, in any manner, liable under statutory law? May I declare an accountant-client privilege in any probable litigation scenario?
When sued, within the common law division, an auditing professional may be liable to two classes of persons: clients and third parties. Beginning with the former class, Mallor, Barnes, Bowers, and Langvardt— authors of the textbook entitled Business Law: The Ethical, Global, and E-commerce Environment— avow that auditing professionals have three sources of civil liabilities to their clients: contract, tort, and trust (Mallor et al. 1189). In regards to the final source aforementioned, I am not liable for breach of trust for I preserved the confidentiality of my client’s …show more content…
If the auditor fails to convey reliable information to the client by not executing a quality audit of the company’s financial statements in accordance with GAAS, that authors argue that he/she is ordinarily liable for compensatory damages and consequential damages, such as the costs the client will incur to hire an alternate auditor to complete the work (Mallor et al. 1189). The numerous inexactitudes present within Cardozo & Co.’s financial statements, which I failed to detect, serve as a testament to the fact that I did not perform a quality audit in accordance with GAAS. I failed to reasonably assure my client that the company’s financial statements were presented fairly in accordance with GAAP and not materially misstated. I failed to uncover the president’s embezzlement scheme and perform my due diligence in regards to the “irregular” entries. Furthermore, I failed to fulfill my implied duty to utilize professional skepticism and to be competent in accounting principles and professional auditing standards. Therefore, I have a contractual liability to my client for breach of
Comparably, displeased investors who purchased Cardozo & Co.’s shares on the date of the IPO, as well as those who purchased shares in anticipation of the propositioned merger, have filed a private lawsuit against me. To conclude this chronicle of calamitous events, I have been made aware that Cardozo & Co. is under investigation by the United States Department of Justice (DOJ), the Internal Revenue Service (IRS), the Securities Exchange Commission (SEC), the Florida Attorney General, and the Florida Department of Revenue. I must now, as a result of my actions, ask myself: Am I, in any manner, liable under common law? Am I, in any manner, liable under statutory law? May I declare an accountant-client privilege in any probable litigation scenario?
When sued, within the common law division, an auditing professional may be liable to two classes of persons: clients and third parties. Beginning with the former class, Mallor, Barnes, Bowers, and Langvardt— authors of the textbook entitled Business Law: The Ethical, Global, and E-commerce Environment— avow that auditing professionals have three sources of civil liabilities to their clients: contract, tort, and trust (Mallor et al. 1189). In regards to the final source aforementioned, I am not liable for breach of trust for I preserved the confidentiality of my client’s …show more content…
If the auditor fails to convey reliable information to the client by not executing a quality audit of the company’s financial statements in accordance with GAAS, that authors argue that he/she is ordinarily liable for compensatory damages and consequential damages, such as the costs the client will incur to hire an alternate auditor to complete the work (Mallor et al. 1189). The numerous inexactitudes present within Cardozo & Co.’s financial statements, which I failed to detect, serve as a testament to the fact that I did not perform a quality audit in accordance with GAAS. I failed to reasonably assure my client that the company’s financial statements were presented fairly in accordance with GAAP and not materially misstated. I failed to uncover the president’s embezzlement scheme and perform my due diligence in regards to the “irregular” entries. Furthermore, I failed to fulfill my implied duty to utilize professional skepticism and to be competent in accounting principles and professional auditing standards. Therefore, I have a contractual liability to my client for breach of