Assume that an auditor failed to complete an audit for a client on an agreed-upon date. The client files a lawsuit against the auditor, claiming that this delay caused the client to delay a public offering of common stock. A potential defense for the auditor is that the public offering was delayed by the underwriters due to the weakening financial condition of the client.

Question

Quizplus · Accepted Answer

The auditor's potential defense is valid, as the delay in the public offering could have been caused by factors beyond the auditor's control, such as a weakening financial condition or the underwriters' decisions. Therefore, the lawsuit may not be solely attributable to the auditor's failure to complete the audit on time.

Assume That an Auditor Failed to Complete an Audit for a Client