Saxon Inc.entrusted Thomas Simpson,an independent CPA,to prepare an audit report to apply for a loan from Sharp Lenders.Simpson merely accepted the accuracy of the client's books without proper investigation while representing that he had completed Saxon's audit.A careful audit,however,would have discovered that an employee of Saxon's was regularly embezzling funds from him.Simpson is:

Question

Quizplus · Accepted Answer

Suppose an accountant represents that he completed an audit of the client when in reality he merely accepted the accuracy of the client's books without investigation and a careful audit discovers that an employee of the client was regularly embezzling funds from the client,the accountant may be liable in fraud for any losses suffered by the client from the time when the audit should have discovered the embezzlement.

Saxon Incentrusted Thomas Simpson,an Independent CPA,to Prepare an Audit Report to to Apply