Auditor liability (Task assessment)
After making the reading entitled The legal responsibility of the auditor participates in the following forum to discuss and analyze the following situation:
The company Santiago & Associates sued his public auditors alleging embezzlement of money that occurred in the business for several years and that auditors detected. The public accounting firm said that although they could be responsible, the company also failed to ignore the recommendations to improve internal control in the company and which therefore can not be sued. In this lawsuit shareholders joined the company because, as a result, were tainted by improper financial statements and made wrong decisions.
In light of the above situation, says forum what is the legal responsibility of the auditor and whether it is responsible for the economic loss of the customer.
By exposing your answer you should:
• Identify the types of legal liability of auditors and explain each.
• Make reference to legal cases that deal with the issue of liability.
• Defend your opinion and justify your answer with an example.