When performing an audit, an auditor would most likely be considered negligent if they failed to:
A)detect all of the client's fraudulent activities.
B)include a negligence disclaimer in the client engagement letter.
C)warn the client of any known internal control weaknesses.
D)warn the client's customers of embezzlement by the client's employees.

Question

Quizplus · Accepted Answer

As part of an auditor's responsibility, they are required to inform their clients of any known internal control weaknesses in a timely manner. If an auditor fails to do so, they can be found negligent as it could result in losses or damages to the client's business. Detecting all of the client's fraudulent activities is also an important responsibility, but auditors may not always be able to detect every instance. Including a negligence disclaimer in the client engagement letter is not sufficient to absolve an auditor of liability for negligence. It is not the responsibility of the auditor to inform the client's customers of embezzlement by the client's employees.

When Performing an Audit, an Auditor Would Most Likely Be