Which of the following is a true statement regarding auditors' liability?

Question

Quizplus · Accepted Answer

The most common source of lawsuits against CPAs is from clients. This is due to the fact that clients have a direct contractual relationship with their auditors and can sue for breach of contract or negligence. It is important for auditors to have professional liability insurance to protect themselves against potential lawsuits. A and B are both false statements, as the level of care is not always easy to determine and engagement letters do not relieve the auditor of all liability. C is also false, as auditors are not always expected to uncover fraud and cannot be automatically considered guilty of negligence if fraud is discovered.

Which of the Following Is a True Statement Regarding Auditors