to the client and third parties relying on the accountant's work. Accountants can be sued for fraud and negligence in performance of duties". CPAS opinions affect their clients and their judgments can further affect investors, stockholders, firm creditors, or even partners. Large public accounting firms perform thousands of audits annually. Ultimately they will find unmodified reports on financial statements that could appear to be misleading. If CPAS fail to modify the audit report on financial statements that are materially misstated, investors and firm creditors may experience substantial losses. If investors sustain losses they will attempt to recover them as long as the price to bring suit is low and there is a chance for recovery. Any public accounting firm may find itself in litigation no matter how careful the CPAS were. ed Public Accountants (CPAS) is the "responsibility of the accountant REQUIRED: tis clear that auditors faced huge amount of liability from the services rendered. Briefly explain with example FOUR (4) main sources of auditor's legal liability. (8 marks) (2 marks) b. List any FOUR Auditors' defense against the liability exposures