Solis & Co., a national accounting firm, was hired to conduct an audit of Huntington Corp.'s...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Solis & Co., a national accounting firm, was hired to conduct an audit of Huntington Corp.'s financial statements. Solis & Co. negligently conducted the audit and failed to discover $1 million in false receivables that were based on fictitious sales and other suspicious activities. Solis & Co. rendered an unqualified opinion and provided 32 copies of the audited financial statements to Huntington Corp. Huntington gave one copy to Stemler State Bank, who then made a loan to Huntington based on the information in the audited statement. Solis & Co. was unaware that the statements would be provided to anyone outside of Huntington. When Huntington failed to repay the loan, Stemler State Bank brought a negligence action against Solis & Co. Under which theory of liability would Solis & Co. be liable to Stemler State Bank? Solis & Co., a national accounting firm, was hired to conduct an audit of Huntington Corp.'s financial statements. Solis & Co. negligently conducted the audit and failed to discover $1 million in false receivables that were based on fictitious sales and other suspicious activities. Solis & Co. rendered an unqualified opinion and provided 32 copies of the audited financial statements to Huntington Corp. Huntington gave one copy to Stemler State Bank, who then made a loan to Huntington based on the information in the audited statement. Solis & Co. was unaware that the statements would be provided to anyone outside of Huntington. When Huntington failed to repay the loan, Stemler State Bank brought a negligence action against Solis & Co. Under which theory of liability would Solis & Co. be liable to Stemler State Bank?
Expert Answer:
Answer rating: 100% (QA)
In the given scenario Solis Co the accounting firm could potentially be liable to Stemler State Bank ... View the full answer
Related Book For
Auditing and Assurance Services A Systematic Approach
ISBN: 978-1259162343
9th edition
Authors: William Messier, Steven Glover, Douglas Prawitt
Posted Date:
Students also viewed these accounting questions
-
Below is the information of fixed assets prepared for Wiggins Ice Creams as at 31 December 20X3: Equipment Motor vehicles Depreciation Equipment Vehicles USD (000) 14,950 20,700 3,450 9,200 The...
-
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
-
In the business world of the Roaring Twenties, the schemes and scams of flimflam artists and confidence men were legendary. The absence of a strong regulatory system at the federal level to police...
-
Cutler Manufacturing manufactures and distributes specialty piping used in the construction industry. Due to the recent contraction in the commercial construction market, the company has had...
-
Let A = {1, 2, 3, 4, 5, 6, 7, 8}. In how many ways can we partition A as A1 A2 A3 with (a) 1, 2 A1, 3, 4 A2, and 5, 6, 7 A3? (b) 1,2 A1, 3, 4 A2, 5, 6 A3, and |A1| =3? (c) 1, 2 A1, 3, 4 A2,...
-
List at least two advantages to animal cloning.
-
\((14-25) \times 2\) Perform the indicated calculation.
-
In recent years, Hrubeck Company purchased three machines. Because of heavy turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each...
-
Suppose you held a diversified portfolio consisting of a $7,500investment in each of 20 different common stocks. The portfolio'sbeta is 2.05. Now suppose you decided to sell one of the stocks inyou 2...
-
3. What is the powder sintering process? Cold treatment used to improve a material's strength and structural integrity Metal freezed to improve its strength and structural integrity Thermal treatment...
-
This week, you will write a review of literature based on the technology you are investigating for Robotic Process Automation. A review of literature may be defined as an analysis of published...
-
Five completing philosophies strongly influence the role of marketing and marketing activities within an organization. Name and briefly describe each of these five philosophies.
-
Describe the activities of a cost management control system. We are defining an enterprise as an organization which has a purpose to provide for others. This can be a governmental unit (Federal,...
-
II. A gas mixture, with the mole fraction listed below, enters the turbine of Figure at 1200kPa and 600K with an entering volume flow rate of 1.2m /s. The mixture leaves the turbine at 300K....
-
Omnichannel marketing is defined as the strategy of providing customers with information, products, services, and support through multiple synchronized distribution channels seamlessly. Consumers...
-
An elderly client, Juan Martinez, comes to lawyer Sally Phillips for a power of attorney and revocable living trust.Sally asks paralegal Jane Grisham to include the following provisions in the legal...
-
In your audit of Garza Company, you find that a physical inventory on December 31, 2012, showed merchandise with a cost of $441,000 was on hand at that date. You also discover the following items...
-
How are the desired confidence level, the tolerable misstatement, and the expected misstatement related to sample size?
-
Multiple Choice 1. An independent audit aids in the communication of economic data because the audit a. Confirms the exact accuracy of managements financial representations. b. Lends credibility to...
-
What are some of the common documents encountered by auditors that are required by the Securities Exchange Act of 1934? What is the purpose of each of these documents?
-
Describe the characteristics of a municipal bond, including tax factors.
-
List three examples of reasons state and local governments might issue bonds.
-
Compare the three ways you can purchase mutual funds.
Study smarter with the SolutionInn App