1. The accounting firm "failed to employ that degree of vigilance, inquisitiveness, and analysis of the evidence available that is necessary in a professional undertaking and is recommended in all well-known and authoritative works on auditing." 2. Although the accounting profession claims that the auditor is not a guarantor and should not be liable for fraud, the SEC ruled that "the discovery of gross overstatements in the accounts is a major purpose of such an audit even though it [may] be conceded that the audit] might not disclose every minor defalcation." 3. The SEC advised the accounting profession to take physical inventories and to require confirmations of accounts and notes receivable. 4. Page 356 The SEC recommended that the board of directors nominate the auditors and that the activities of management be included in the audit. The SEC made additional recommendations to the AICPA, including to distinguish auditing "standards" from auditing procedures" Also, the auditor's certificate should state whether the audit was made in accordance with generally accepted auditing standards applicable in the circumstances." Subsequently, the AICPA adopted these procedures and eventually codified them in the Statement on Auditing Standards. Answer the following discussion question: Do you think that the inability of auditors to detect a financial statement misstatement due to gross deficiencies in internal controls over financial reporting should expose auditors to litigation? Why or why not