Question
12. Your audit client recently suffered a huge loss when a large customer discontinued doing business with your client after receiving defective merchandise. Due to
12. Your audit client recently suffered a huge loss when a large customer discontinued doing business with your client after receiving defective merchandise. Due to this loss, your client is struggling to survive. Your client does not want other customers to find out about its production and financial difficulties. However, in accordance with accounting standards, you are required to disclose that you have substantial doubt about this client remaining a viable going concern. Your client has threatened to hold you responsible if you base your going concerned disclosure on confidential information about its liquidity that you learned during the course of the audit. Would disclosure of this clients financial condition violate your duty of confidentiality?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started