I.discuss an auditor's defense for Lack of Duty if a third party sues the auditor. II.Identify types
Question:
I.discuss an auditor's defense for
"Lack of Duty" if a third party sues the auditor.
II.Identify types of third parties on.
In class we noted that there are different types of third parties.Classify the independent situations shown below as either (a) Primary beneficiary (Identified User; Near Privity);
(b) Foreseen; or (c) Foreseeable (reasonably foreseeable).
1. A potential purchaser of a business who asks for audited
financial statements of that business and is known to the
auditor.
2. A potential purchaser of a business who asks for audited
financial statements of that business and is NOT known to the
auditor.However, the auditor knows that his or her client
has asked for an audit because of an intention to sell the
business.
3. The company borrowed money from Bank ABC.The auditor had been
led to believe that the client would use the financial
statements only to facilitate sale of the company.Bank ABC is
what type of third party?
4. A vendor who sold inventory to a company.
Answers:Type of third Party
Use letters!
1.___
2.____
3.___
4.___
Auditing Cases An Active Learning Approach
ISBN: 9781266566899
2nd Edition
Authors: Mark S. Beasley, Frank A. Buckless, Steven M. Glover, Douglas F. Prawitt