Multiple Choice
Small Town Lumberyard Limited (STLL) needed an additional bank loan to finance its operations.To make its financial statements look better,the company overstated its inventory and overstated its accounts payable.The auditors did not detect this deliberate misstatement because they conducted limited tests of inventory and did not confirm accounts payable.Other auditors agreed that the procedures conducted during this audit were inadequate.The auditors of STLL would likely be considered to be
A) guilty of fraud.
B) negligent.
C) contributorily negligent with STLL.
D) guilty of constructive fraud.
Correct Answer:
Verified
Correct Answer:
Verified
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