Question

Liability of auditors has evolved over the past 80 years through many changes in legislation brought on by the cycle of fraud over the years and by many court cases that broadened the scope of auditor liability.

Do you believe the courts and legislatures in establishing auditor liability have been fair to the auditors or too harsh on the auditors? Discuss why you believe the way you do.

Answer 1

classmate Date Page TowW Answer Auditor Liability An auditor responsiblity is Ito proviele reasonable assurance that La Reporting entity is free from meterial Misstatement weather due to traud or error And this the Responsiblity of Auditors and they must check weather the statement is in complaince with | Auelitor liability. Also, Auditor Must be ! laware about the latest legislation Rules regarling Auditor liability - Due to the change in Business Activity on the way Business operate, there are many upalates over the past year regarding Auditor liability o Pitfrent countries have Hellttrent legislation regarding Auditor_ my so, in order to keep up with I changing Business Activity legislation evolved with a simplementing /Amending New changesa liability. Scanned with CamSchner

classmate Date Page Types OF LIABILITY - - Criminal offences Civil Oftences Criminal offences Like an individual organisation auditors are bouard by the laws in the Countries in which they operale. So, under the Criminal law auditors Could be procesuted for acts such As Fraud and insider trading. This means that auditors Could be prococuted in a criminal Court for either knowingly or recklessly an' inappropriate taudit Opinion So there lies the Risk for auditors, even after the audit repost is submitter they have the risk of reporting inappropriate audit report. from an auditor percepective they might feel, this is too harsh. But if you look from aro Share- CST CEJ CamScanner

classmate Date Page holder point of you. They need Best reports which is free from meteriel Misstatement and Fraud and error. - in the legislation is not Solid , Auditors Might be do antair Practices to protect the client / Business. civil oftences There are two pieces of civil low contract law. - law of tort. under the Contrack law parties can seek for a breach of Contractual obligation, which is similar to any I profession, Shareholder can seek remedy from an auditor it they fail to Comply with the terms of an engagena I lettera - under the law of tort auditors can be sued for negligence if they Breach an duty or Care towards a third party. Scanned with CamScanner

classmate Date Page Therefore, we can say that this law 1 auditor liability is there to protect stakeholders or the people who uses the audit report and its the responsiblily! of auditor to be updated with latest legislation regarding the Auditor liability. - it might feel too harsh for auditor, but this job is having higher I responsiblity to protect or give the fright intormation for the people who uses the Auditor repost. Scattered with Can Scanner