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Cadish Cadish
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6 years ago
Small Town Lumberyard Limited (STLL) needed an additional loan from its bank to finance its operations. To make its financial statements look better, the company overstated its inventory and overstated its accounts payable. The auditors did not detect this deliberate misstatement because they conducted limited tests of inventory and did not confirm accounts payable. Other auditors agreed that the procedures conducted during this audit were inadequate. The auditors of STLL would likely be considered to be
A) guilty of fraud.
B) negligent.
C) contributorily negligent with STLL.
D) guilty of constructive fraud.
Textbook 
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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charleshardtcharleshardt
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6 years ago
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