Have you often wondered why investors sue the external auditors when massive fraud negatively affects the...

Have you often wondered why investors sue the external auditors when massive fraud negatively affects the stock of a public company up to and including bankruptcy? Often when financial fraud is discovered, shareholders attempt to recover their losses by suing the external audit firm for negligence in not discovering the fraud earlier during a routine attestation engagement. Discuss whether privity and near privity (Ultramares Corp. v. Touche) is the same as ordinary negligence by including two to four legal liabilities associated with these terms

Expert Solution

ekkarill92 answered 1 year ago

Have you often wondered why investors sue the external auditors when massive fraud negatively affects the...

Have you often wondered why investors sue the external auditors when massive fraud negatively affects the stock of a public company up to and including bankruptcy? Often when financial fraud is discovered, shareholders attempt to recover their losses by suing the external audit firm for negligence in not discovering the fraud earlier during a routine attestation engagement. Discuss whether privity and near privity (Ultramares Corp. v. Touche) is the same as ordinary negligence by including two to four legal liabilities...

Internal control is important to an organization. Why do you think external auditors need to understand...

Internal control is important to an organization. Why do you think external auditors need to understand their client's internal control over financial reporting?

Have you ever wondered, when you weigh yourself on a scale, how the scale is calibrated?...

Have you ever wondered, when you weigh yourself on a scale, how the scale is calibrated? How is it known that 150 pounds on that scale is the same as 150 pounds on another? Scales are calibrated by comparison to standard weights. Of course, millions of instruments require calibration and they cannot all be compared to the same weight. Rather, there is a single definitive weight, and a hierarchy of other weights that are compared to it. The U.S. National...

Have you ever wondered what it means to click the “offset carbon emissions” button when you...

Have you ever wondered what it means to click the “offset carbon emissions” button when you book a flight or train trip? It adds a small cost to your ticket, but how does this reduce emissions? The money is typically used to fund projects that reduce carbon emissions. One such project type is the introduction of more efficient cooking stoves into communities. Much of the world uses inefficient charcoal or wood stoves that result in excessive indoor air pollution, deforestation,...

Have you ever wondered what it means to click the “offset carbon emissions” button when you...

Have you ever wondered what it means to click the “offset carbon emissions” button when you book a flight or train trip? It adds a small cost to your ticket, but how does this reduce emissions? The money is typically used to fund projects that reduce carbon emissions. One such project type is the introduction of more efficient cooking stoves into communities. Much of the world uses inefficient charcoal or wood stoves that result in excessive indoor air pollution, deforestation,...

Have you ever wondered what happens to your recycled plastics when they are picked up at...

Have you ever wondered what happens to your recycled plastics when they are picked up at the curb by the trash truck? It gives everybody a good feeling to recycle, but what if recycling means more trash fees? Michael Dumper, CEO of Belmont Waste Hauling, recently told citizens of Belmont at a recent Town Council meeting that because of the closure of the closest recycling center, he will now need to haul recycled plastics almost 200 miles to be recycled....

Question

Have you often wondered why investors sue the external auditors when massive fraud negatively affects the...

Solutions

Expert Solution

Related Solutions

Have you often wondered why investors sue the external auditors when massive fraud negatively affects the...

Internal control is important to an organization. Why do you think external auditors need to understand...

Have you ever wondered, when you weigh yourself on a scale, how the scale is calibrated?...

Have you ever wondered what it means to click the “offset carbon emissions” button when you...

Have you ever wondered what it means to click the “offset carbon emissions” button when you...

Have you ever wondered what happens to your recycled plastics when they are picked up at...

Consider this statement, “Auditors should only use professional skepticism when considering fraud risk.” Do you agree...

determine if corruption schemes or financial statement fraud occurs more often. discuss why you think that...

Discuss in your own words why internal auditors often fail to detect frauds. You should discuss,...

Why is important to understand what motivates employees to commit fraud when you are planning to...