Proportionate liability is the risk an auditor takes that an entity will fail, and he or she is liable for all losses incurred by the entity.

Question

Quizplus · Accepted Answer

Proportionate liability means that the auditor is only liable for losses that can be directly attributed to their negligence or misconduct, not for all losses incurred by the entity. This is a more fair and balanced approach to liability than the traditional "all or nothing" rule.

Proportionate Liability Is the Risk an Auditor Takes That an Entity