PA Was Engaged by Microcomputer Distributor Limited (MDL)to Conduct a Review

PA was engaged by Microcomputer Distributor Limited (MDL) to conduct a review engagement.The financial statements are used primarily by the shareholders,management,and by the bank.Recently,an employee was fired for stealing computer parts,primarily chips and boards that could easily be placed in a pocket.MDL is suing PA because they believed that audit procedures,such as counting inventory,would have detected this fraud.What is PA's best defence?

A) absence of causal connection
B) lack of negligence
C) contributory negligence
D) duty of care not required

Correct Answer:

Verified

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