A CPA firm notifies their audit client of a material weakness in internal controls in the warehouse storing inventories. Subsequently, the client discovers a large theft of inventory in the warehouse. In this case, the CPA firm would have the defense of contributor negligence.

Question

Quizplus · Accepted Answer

Contributor negligence can be a defense if the client was informed of the weakness and failed to take corrective action, contributing to the loss.

A CPA Firm Notifies Their Audit Client of a Material