An auditor, using the same degree of due care as other members of the profession, fails to identify an inadequate allowance for bad debts. This occurrence is an example of:

Question

Quizplus · Accepted Answer

This is an example of an error in judgment, as the auditor used due care but made an incorrect judgment about the adequacy of the allowance for bad debts. Negligence would imply a lack of due care, while fraud would imply intentionally misleading information. Constructive negligence is not a recognized term in auditing.

An Auditor, Using the Same Degree of Due Care as Other