Author Question: As a consequence of his failure to adhere to generally accepted auditing standards in the course of ... (Read 86 times)

olgamartinez04 · **on:** Aug 21, 2022

As a consequence of his failure to adhere to generally accepted auditing standards in the course of his examination of the Lamp Corp., Harrison, CPA, did not detect the embezzlement of a material amount of funds by the company's controller. As a matter of common law, to what extent would Harrison be liable to the Lamp Corp. for losses attributable to the theft?
◦ He would have no liability, since the ordinary examination cannot be relied upon to detect thefts of assets by employees.
◦ He would have no liability because privity of contract is lacking.
◦ He would be liable for losses attributable to his negligence.
◦ He would be liable only if it could be proven that he was grossly negligent.

Harsh06 · **Reply #1 on:** Aug 21, 2022

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