The Ethics Of The Audit

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As the wide-ranging business environment goes down, the rate of auditor litigation has increased. Lawsuits are a continuous threat to the auditing line of work. In this paper, we present evidence on lawsuits having a positive effect on auditors audit liabilities. It is the auditors’ responsibility to plan and complete the audit to obtain practical guarantee about if the financial statements are free of material misstatement or if they are caused by error or fraud. A mixture of court decisions and economic state of affairs has shaped the legal setting for the auditing line of work and the resulting lawsuits. Even though auditors are potentially legally responsible for both criminal and civil offenses; lawsuits have encouraged auditors to reduce their risks of legal action by instituting sound quality control and look at procedures. The majority of the time, for litigation to arise, the auditor must have given an unqualified audit opinion to a set of financial statements that are afterward revealed to have material misstatements or material omissions. According to the ACCA an auditor liability is increasingly concerning, both in terms of audit quality and the reputation of the profession but also in terms of the cost to the industry and the barriers this creates to competition within the audit market.

Auditors are potentially liable for both criminal and civil offenses. Criminal offenses occur when individuals or organizations violate a government imposed law. Auditors

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