Question

apier vine vuestion Compare the liability of CPAs and other professionals such as physicians, attorneys, and automobile manufacturers.

Answer 1

For an auditor independence is essential as the users of financial statements expect a viewpoint which is unbiased in the CPA's attestation to the financial statement fairness. The value of the audit function is eliminated when the users believe that auditors are not independent. On contrary the other professions such as physicians, attorneys, dentists, doctors, etc. often represent their clients and services performed by them are intended primarily to assist their clients. Consequently there is no requirement of assumption of independence.

When an attorney or a physician is negligent, the injured party is often limited to the professional's client or patient. But when the CPAs are negligent in expressing an opinion on financial statements, the firm creditors and investors who are in millions may sustain losses. Thus potential legal liability for professional "malpractice" for CPAs are much wider compared to the other professionals