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Cadish Cadish
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6 years ago
A bank sues the auditor after making a loan to Klaxxon, a company that went bankrupt. The bank indicates that they relied on the year-end financial statements of Klaxxon to make the lending decision. The bank analyst indicates that the audit opinion was unqualified so he assumed that Klaxxon was a going concern. The auditor defends himself by referring to a note disclosure in the financial statements about the company's economic dependence on one buyer, Dexters Corp. Dexters Corp had experienced some significant financial trouble for the past year and went bankrupt 3 months after the financial statements of Klaxxon were released. The PA's liability is likely
A) contributory negligence.
B) fraud.
C) breach of contract.
D) gross negligence.
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Auditing: The Art and Science of Assurance Engagements, Canadian Edition

Auditing: The Art and Science of Assurance Engagements, Canadian Edition


Edition: 12th
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Auditing: The Art and Science of Assurance Engagements, Twelfth Canadian Edition, 12/E (Arens, Elder, Beasley, Splettstoesser)
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inthe80sinthe80s
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Cadish Author
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Auditing: The Art and Science of Assurance Engagements, Twelfth Canadian Edition, 12/E (Arens, Elder, Beasley, Splettstoesser)
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