The failure of an auditor to disclose the possible obsolescence of a firm's major product is a judgment call and not an ethical issue.

Question

Quizplus · Accepted Answer

The failure of an auditor to disclose the possible obsolescence of a firm's major product is an ethical issue as it involves the disclosure of relevant information that could materially affect the financial statements and influence the decisions of stakeholders. The auditor has a professional duty to provide an independent and objective assessment of the client's financial position and performance, and failing to disclose material information could result in misleading financial statements, loss of investor confidence, and potential legal liability.

The Failure of an Auditor to Disclose the Possible Obsolescence