Most accounting and auditing professionals agree that when an audit has failed to uncover material misstatements, and the wrong type of audit opinion is issued, the audit firm:
A) deserves to lose the lawsuit.
B) should be asked to defend the quality of the audit.
C) should not be held responsible for the financial loss suffered by others.
D) has failed to follow auditing standards.

Question

Quizplus · Accepted Answer

When an audit has failed to uncover material misstatements, and the wrong type of audit opinion is issued, the audit firm should be asked to defend the quality of the audit as they have not followed auditing standards properly. While they may not be held solely responsible for the financial loss suffered by others, they may still be liable depending on the circumstances. Therefore, option B is the best choice.

Most Accounting and Auditing Professionals Agree That When an Audit