An auditor who commits fraud will be liable to anybody who might reasonably have been presumed to rely on the auditor's statement.

Question

Quizplus · Accepted Answer

This is known as the concept of "foreseeable users" or "foreseeable third parties" in auditing. The auditor has a responsibility to act with due care and accuracy in conducting an audit and issuing an opinion, and can be held liable for any damages caused by fraud or negligence. Any individual or organization who might reasonably rely on the auditor's statement, such as investors or creditors, can hold the auditor liable for any harm suffered due to the auditor's fraud.

An Auditor Who Commits Fraud Will Be Liable to Anybody