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

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The auditor's failure in identifying an inadequate allowance for bad debts can be classified as an error in judgment. Negligence is a failure to exercise appropriate care, which may result in an error or an omission. Fraud involves intentional misrepresentation of information. Constructive negligence is not a recognized term in auditing.

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