The court found that Roberts & Associates had performed a negligent audit of Pinnacle Ltd, but the plaintiff did not receive damages because the court found insufficient proof of causation.Causation means that:
A)the auditor caused the misstatement of the financial report.
B)the auditor's failure to perform a proper audit caused the damages.
C)the auditor was negligent, but the plaintiff suffered no real damages.
D)the plaintiff was an unforeseen third-party user of the financial report.

Question

Quizplus · Accepted Answer

Causation refers to the link between the auditor's negligence and the damages suffered by the plaintiff. In this case, the court found that Roberts & Associates had performed a negligent audit, but also found insufficient proof that this negligence had directly caused the damages suffered by the plaintiff. Therefore, choice B, which states that the auditor's failure to perform a proper audit caused the damages, is the best answer.

The Court Found That Roberts & Associates Had Performed a Negligent