Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN: 9781337619455
Author: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher: Cengage Learning
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Question
Chapter 4, Problem 8RQSC
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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Students have asked these similar questions
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 (MindTap Course List)
Ch. 4 - Prob. 1CYBKCh. 4 - Prob. 2CYBKCh. 4 - Prob. 3CYBKCh. 4 - Prob. 4CYBKCh. 4 - Prob. 5CYBKCh. 4 - Prob. 6CYBKCh. 4 - Prob. 7CYBKCh. 4 - Prob. 8CYBKCh. 4 - Prob. 9CYBKCh. 4 - Prob. 10CYBK
Ch. 4 - Prob. 11CYBKCh. 4 - Prob. 12CYBKCh. 4 - Prob. 1RQSCCh. 4 - Prob. 2RQSCCh. 4 - Prob. 3RQSCCh. 4 - Prob. 4RQSCCh. 4 - Prob. 5RQSCCh. 4 - Prob. 6RQSCCh. 4 - Refer to the Focus on Fraud feature “Moss Adams...Ch. 4 - Prob. 8RQSCCh. 4 - Prob. 9RQSCCh. 4 - Prob. 10RQSCCh. 4 - Prob. 11RQSCCh. 4 - Prob. 12RQSCCh. 4 - Prob. 13RQSCCh. 4 - Prob. 14RQSCCh. 4 - Prob. 15RQSCCh. 4 - Prob. 16RQSCCh. 4 - Prob. 17RQSCCh. 4 - Prob. 18RQSCCh. 4 - Prob. 19RQSCCh. 4 - Prob. 20RQSCCh. 4 - Prob. 21RQSCCh. 4 - Able Corporation decided to make a public offering...Ch. 4 - KPMG (LO 1, 2, 3) KPMG LLP served as the external...Ch. 4 - ToshIba, EY (LO 1, 2, 3) In 2015, the business...
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- 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_forwardIn this citation, what does the number 1922 mean: 823 US 1922 (2020)? O a. It is the volume number O b. It is the page number O C. It is the name of the set of books in which the case is located O d. It is the year in which the case was decidedarrow_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
- How 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_forwardwhat 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_forward
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