What are the liabilities of the auditor

Assignment Help Accounting Basics
Reference no: EM132639822

Question - Sonny Manufacturing ltd sought a million loan from bank of Australia. The bank insisted that audited financial statements be submitted before it would extend the credit. Sonny agreed to work it and also agreed to pay the audit fee. An audit was performed by an independent qualified accountant who submitted his report to sonny to be used solely for the purpose of loan negotiation with the bank. The bank, after reviewing the audited financial statements, decided not to extend the loan to sonny. The bank had been using some ratios from the financial statements and decided they were too low. Sonny used the financial statements to obtain a loan from another financial institution. However, it was subsequently discovered that the auditor had failed to detect significant embezzlement by a senior manager at Sonny.

Required -

What are the liabilities of the auditor?

And to whom is the auditor liable to.

If the auditor did cover the embezzlement, and noted it in the notes to the financial statements, is he still liable and to whom.

What factors would appropriately be considered before the auditor's liability is confirmed.

Reference no: EM132639822

Questions Cloud

Latest unemployment and inflation data : After researching the latest consumer confidence estimates, in addition to the latest unemployment and inflation estimates
What is today value of the bequest : The first payment will occur in a year and will be $3,000. Assume that the interest rate is 14% per year. What is today's value of the bequest
Why does the company net income increase : The controller of Tri Con Global Systems Inc. has developed. Why does the company's net income increase when the new costing system is applied?
Find and identify two specific australian companies : Identify 2 specific Australian companies that your chosen job costing system is suitable for, and explain why? Discuss in detail and provide the example.
What are the liabilities of the auditor : What are the liabilities of the auditor? What factors would appropriately be considered before the auditor's liability is confirmed
Explain why the ad curve is downward sloping : se the Quantity Theory of Money to explain why the AD curve is downward sloping.
Find present value payback period : Find present value payback period, in years, of the proposed investment under the assumption that cash inflows occur evenly throughout the year.
Negative aggregate supply shock in us history : Provide an example of a recession caused by a negative aggregate supply shock in the U.S. history.
Determine the future value : Question - Determine the future value in Year 12 of an ordinary annuity cash flow of $6,000 per year at an interest rate of 4% per year

Reviews

Write a Review

Accounting Basics Questions & Answers

  Discuss denver office of a national public accounting firm

Summarize the arguments for remaining silent and not offering any advice to SuperFund on this matter

  Analyze the major pros and cons of preparing company budgets

Analyze the major pros and cons of preparing company budgets. Analyze the most common responsibility reporting systems.

  Calculate the holding period return on a before-tax basis

Calculate the holding period return on a before-tax basis for each of these four investments.etermine the after-tax HPR for each of their four investments.

  Cost of ending inventory and cost of goods sold

Calculate the cost of the ending inventory and the cost of goods sold for each cost flow assumption, using a perpetual inventory system. Assume a sale of 430 units occurred on June 15 for a selling price of $8 and a sale of 370 units on June 27 fo..

  Accounting, sociology, and business law discussion

Based on the video, explain two (2) advantages and two (2) disadvantages in using both the cash and the accrual basis of accounting.Then, determine the one (1) that you believe provides the most useful financial information to users.

  What would be the geometric mean rate of return

What would be the geometric mean rate of return for the two-year period 2017-2018. If they bought $2000 of company's stock at the start of 2017

  What is the replacement cost of the asset on January

The asset is appraised as having a sound value (depreciated replacement cost) of P720,000. What is the replacement cost of the asset on January 1, 2022

  Discuss how would the organization identify the cost drivers

Describe activity-based costing system and the common cost drivers that could be used

  Which two values are violated by dhiraj and co

Aman paid the amount by cheque within stipulated time but Dhiraj and Co. refused for discount. Which two values are violated by Dhiraj& Co.?

  Find the entry to record the customer warranty repairs

Customers returned merchandise for warranty repairs during the month that used $9,400 in parts for repairs. Find the entry to record customer warranty repairs

  Prepare an income statement for year ended december

Prepare an income statement for year ended December, Milan Company had the following activity for the year ended December

  Evaluate the manager reasoning and explain the effects

Evaluate the manager's reasoning and explain the effects this could have on the current and future year's financial statements

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd