Scenario 1

The following clause was included in the engagement letter between Limits and Lobits, CPAs (L&L) and Fair, Inc., an audit client of (L&L). Fair, Inc. agrees to release, indemnify, and hold Limits & Lobits, CPAs (its partners, heirs, executors, personal representatives, successors, and assigns) harmless from any liability and costs resulting from fraud caused by or participated in by management of Fair, Inc. Do you think such a clause is ethical? Use ethical reasoning to support your answer with reference to professional standards. (Hint: you may find the content from Chapter 6 helpful in analyzing this case)