Exam 2: Auditors’ legal environment

Which of the following is NOT a test a plaintiff must satisfy in order to recover damages against the auditor?

Legal liability and the cost of defending actions have been a significant problem for the auditing profession in Australia.

Which one of the following was NOT set out as a test for establishing a duty of care in Al Saudi Banque?

In which case was it held that an auditor did not owe a duty of care to potential shareholders?

There are a number of things that audit firms can do to reduce their exposure to lawsuits.Which one of the following is NOT such an item?

Which area of auditing is NOT affected by statutory regulation?

Tort actions against public accounting firms are more common than breach of contract actions because:

The standard of due care to which the auditor is expected to be held is referred to as the reasonable person concept.

Which one of the following was NOT a finding in the Pacific Acceptance case?

An auditor's examination performed in accordance with Australian auditing standard ASA 240 generally should:

In the Columbia Coffee and Tea case, the auditors were found to owe a duty of care to a third party because:

Common law generally allows auditors to withhold information from the courts by claiming such information is privileged.

The judgement in the Caparo case decreed no auditor liability to a third party because:

When the auditors have followed Australian auditing standards yet still fail to discover immaterial fraud, courts will find them liable.

The reasonable person concept establishes in law that:

The Pacific Acceptance case was significant because it:

In the Caparo case, it was stated that the purpose of the audit report is to:

Failure to perform and audit with due care subjects which party to potential criminal liability?

Explain what the following terms mean: 1. reasonable person 2. proximity

Which document serves as an acknowledgement of a third party's reliance on the audited financial reports for decisions?