Audit and issued an unqualified opinion

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Reference no: EM131133419

Melvin, a CPA, was hired by Buy-Um-Up Inc., to audit its financial statements. Due to his negligence, Melvin failed to discover that Morris, chairman the board of directors of Buy-Um-Up, had embezzled $400,000 of the company funds. Melvin finished the audit and issued an unqualified opinion. Six months later, Melvin read in the newspapers that Carl had been caught for embezzling a total of $1,000,000 of company funds. Carl resigned and the company funds were fully recovered from him. Buy-Um-Up sued Melvin. For how much, if anything, is Marvin liable? A. $1,000,000 B. $400,000 C. $1,200,000 D. $600,000 E. Nothing, Melvin is not liable for Morris' embezzlement.

Reference no: EM131133419

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