Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN: 9781305080577
Author: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher: South-Western College Pub
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Question
Chapter 4, Problem 32RSCQ
To determine
Legal Tests
Legal tests are various types of test which are commonly applied the method of evaluation used to resolve the matter of jurisprudence.
To explain: The tests used by courts to determine third party users who can file suit against an auditor for negligence and describe the parties that are defined in these tests.
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For what type of actions can clients bring suit against auditors under common law? What must clientsprove prior to bringing suit in each case?
Distinguish between the legal concepts of actually foreseen third-party users and reasonably foreseeable third-party users. How does each concept establish a basis for an auditor’s legal liability to third parties?
Distinguish between common-law liability and statutory liability for auditors. What is the basis for the difference in liability, and what are the key practical differences between the two, such as burdens of proof, consequences or penalties, intent, etc.?
Chapter 4 Solutions
Auditing: A Risk Based-Approach to Conducting a Quality Audit
Ch. 4 - Prob. 1TFQCh. 4 - Prob. 2TFQCh. 4 - Prob. 3TFQCh. 4 - Prob. 4TFQCh. 4 - Prob. 5TFQCh. 4 - Prob. 6TFQCh. 4 - Prob. 7TFQCh. 4 - Prob. 8TFQCh. 4 - Utilitarian theory holds that what is ethical is...Ch. 4 - Prob. 10TFQ
Ch. 4 - Prob. 11TFQCh. 4 - Prob. 12TFQCh. 4 - Prob. 13MCQCh. 4 - Prob. 14MCQCh. 4 - Prob. 15MCQCh. 4 - Prob. 16MCQCh. 4 - Prob. 17MCQCh. 4 - Prob. 18MCQCh. 4 - Prob. 19MCQCh. 4 - Prob. 20MCQCh. 4 - Prob. 21MCQCh. 4 - Prob. 22MCQCh. 4 - Prob. 23MCQCh. 4 - Prob. 24MCQCh. 4 - Prob. 25RSCQCh. 4 - Prob. 26RSCQCh. 4 - Prob. 27RSCQCh. 4 - Prob. 28RSCQCh. 4 - Prob. 29RSCQCh. 4 - Prob. 30RSCQCh. 4 - Refer to the Focus on Fraud feature “Moss Adams...Ch. 4 - Prob. 32RSCQCh. 4 - Prob. 33RSCQCh. 4 - Prob. 34RSCQCh. 4 - Prob. 35RSCQCh. 4 - Prob. 36RSCQCh. 4 - Prob. 37RSCQCh. 4 - Prob. 38RSCQCh. 4 - Prob. 39RSCQCh. 4 - Prob. 40RSCQCh. 4 - Prob. 41RSCQCh. 4 - Prob. 42RSCQCh. 4 - Prob. 43RSCQCh. 4 - Prob. 44RSCQCh. 4 - Prob. 45RSCQCh. 4 - Prob. 46RSCQCh. 4 - Prob. 47RSCQCh. 4 - Prob. 48RSCQCh. 4 - Prob. 49RSCQCh. 4 - Prob. 50RSCQCh. 4 - Prob. 51RSCQCh. 4 - Refer to Exhibit 4.4. Briefly explain the seven...Ch. 4 - Prob. 53RSCQCh. 4 - Prob. 54RSCQCh. 4 - Prob. 55RSCQCh. 4 - Prob. 56RSCQCh. 4 - Prob. 57RSCQCh. 4 - Prob. 58RSCQCh. 4 - Prob. 59RSCQCh. 4 - Prob. 60RSCQCh. 4 - Prob. 61RSCQCh. 4 - Prob. 62RSCQCh. 4 - Prob. 63RSCQCh. 4 - Prob. 64RSCQCh. 4 - KPMG (LO 1, 2, 3) KPMG LLP served as the external...Ch. 4 - Prob. 66FF
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Similar questions
- What defenses are available to auditors against suits brought by clients under common law? Against suits brought by third parties under common law?arrow_forwardAuditors may be held liable to both their clients and third parties under common law. a. What must a client prove to recover its losses from the auditors under common law? b. In a court that adheres to the precedent set by the Ultramares v. Touche case, what must an ordinary third party prove to recover losses from the auditors under common lawarrow_forwardWhich of the following best describes preponderance of the evidence? O a. A Constitutional right O b. The burden of proof in a criminal case OC. The burden of proof in a civil case d. A type of statutearrow_forward
- What are the concepts of legal responsibility applicable to the accountant in his audit functions and other related services? and mention five (5) recommendations so that the auditor can prevent or protect himself from his legal responsibility.arrow_forwardWhat kind of actions might customers pursue against auditors under the common law doctrine of restitution? In each situation, what evidence do clients need to provide before filing a lawsuit?arrow_forwardWhich of the following cases provides auditors the broadest exposure for liability to thirdparties for ordinary negligence under common law?a. Credit Alliance v. Arthur Andersen.b. Fleet National Bank v. Gloucester Co.c. Rosenblum Inc. v. Adler.d. Ultramares.arrow_forward
- what are the key practical differences between common-law liability and statutory liability for auditors, such as burdens of proof, consequences or penalties, intent, etc.?arrow_forwardHow does the auditor’s opinion differ between scope limitationscaused by client restrictions and limitations resulting from conditions beyond the client’scontrol? Under which of these two will the auditor be most likely to issue a disclaimer ofopinion? Explain.arrow_forward
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