Ricardo, an accountant, contracts to conduct an audit for Sensei Sushi Restaurants. In performing the audit, Ricardo fails to detect certain misconduct. Ricardo is most likely
A) liable if a normal audit would have revealed the misconduct.
B) liable if Ricardo issues a specifically qualified opinion.
C) not liable if Ricardo generally disclaims any liability.
D) not liable if the misconduct was due to Sensei Sushi's negligence.

Question

Ricardo, an accountant, contracts to conduct an audit for Sensei Sushi Restaurants. In performing the audit, Ricardo fails to detect certain misconduct. Ricardo is most likely​
A) ​liable if a normal audit would have revealed the misconduct.
B) ​liable if Ricardo issues a specifically qualified opinion.
C) ​not liable if Ricardo generally disclaims any liability.
D) ​not liable if the misconduct was due to Sensei Sushi's negligence.

Quizplus · Accepted Answer

An accountant is liable if a normal audit would have revealed the misconduct. It is the responsibility of the accountant to exercise due professional care in performing the audit and to detect any material misstatements or fraud. If the accountant fails to do so, and a normal audit would have revealed the misconduct, the accountant may be held liable for any damages suffered by the client.

Ricardo, an Accountant, Contracts to Conduct an Audit for Sensei