Which of the following defense is not generally used when a third party is suing the...

Which of the following defense is not generally used when a third party is suing the auditors? Select one: a. Contributory negligence b. Non-negligent performance c. Absence of causal connection d. Lack of duty to perform service

Expert Solution

All the 4 defenses are used by auditor when law suit is filed against him. But 3 of them are generally used when third party filed the suit.

Answer : Contributory Negligence (This is not generally used by auditor as defense against 3rd party)

Explanation

Contributory negligence - Under this the auditor claims that if client had performed certain obligations then the loss wouldn't have occured.

Non negligent performance - Under this the auditor claims that the audit was conducted in compliance with all applicable accounting standards (Generally Accepted Auditing Standards) and he is not responsible for any minor missings in audit.

Absense of Casual Connection - Auditor claims that there is no direct connection between the auditors breach and the loss caused to entity.

Lack of duty to perform services - Under this the auditor uses engagement letter and tries to prove that there is no expressed terms or implied terms for performing such duty for which he was being sued.

ekkarill92 answered 2 years ago

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