Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Question
Chapter 5, Problem 8RQ
To determine
Identify whether the auditor’s liability under common law affected of the third party is unknown rather than known.
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Students have asked these similar questions
Is the auditor’s liability affected if the third party was unknownrather than known? Explain
What defenses are available to auditors against suits brought by clients under common law? Against suits brought by third parties under common law?
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.?
Chapter 5 Solutions
Auditing And Assurance Services
Ch. 5 - Prob. 1RQCh. 5 - Prob. 2RQCh. 5 - Prob. 3RQCh. 5 - Prob. 4RQCh. 5 - Prob. 5RQCh. 5 - Prob. 6RQCh. 5 - Prob. 7RQCh. 5 - Prob. 8RQCh. 5 - Prob. 9RQCh. 5 - Prob. 10RQ
Ch. 5 - What potential sanctions does the SEC have against...Ch. 5 - Prob. 12RQCh. 5 - Prob. 13RQCh. 5 - Prob. 14.1MCQCh. 5 - Prob. 14.2MCQCh. 5 - Prob. 14.3MCQCh. 5 - Prob. 15.1MCQCh. 5 - Prob. 15.2MCQCh. 5 - Prob. 15.3MCQCh. 5 - Prob. 16.1MCQCh. 5 - Prob. 16.2MCQCh. 5 - Prob. 16.3MCQCh. 5 - Prob. 17DQPCh. 5 - Prob. 18DQPCh. 5 - Prob. 19DQPCh. 5 - Prob. 20DQPCh. 5 - Prob. 21DQPCh. 5 - Prob. 22DQPCh. 5 - Prob. 23DQPCh. 5 - Prob. 24DQPCh. 5 - Prob. 27DQPCh. 5 - Prob. 28C
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Similar questions
- How does auditors’ liability under statutory law arise?arrow_forwardWhat types of actions may an auditor be liable to a client under common law? Why would the clients prefer to sue the auditor for tort action rather than a breach of contract?arrow_forwardHow does the prudent person concept affect the liability of the auditor?arrow_forward
- What does a third-party user of financial statements have to prove under common law in a suit against an auditor for the auditor's negligence?arrow_forwardDistinguish between common-law liability and statutory liability for auditors. What is the basis for the difference in liability?arrow_forwardIn your words, what is the legal responsibility of the auditor?arrow_forward
- 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.?arrow_forwardDistinguish 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?arrow_forwardWhat are the implications of the cautious person notion for the auditor's legal responsibility?arrow_forward
- How would an auditor communicate known there are violations of the law and the auditor's responsibilities according to the law?arrow_forwardWhat does a third-party user of financial statements have to prove under common law in a suit against an auditor for the auditor's negligence? Explain each item with an examplearrow_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_forward
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