Liability to third parties, Auditing

Liability to third parties

For long time liability to third parties existed only in respect to physical damage. Liability for financial loss is a current development.  Illustration of occasions whenever an accountant might run the risk of assuring a liability to third parties might comprise the following:

1) Preparing financial statements or reports for a client whenever it is known or ought to be known that they are planned to be shown to and relied upon by a third party even when the identity of the third party is not revealed.

2) Giving references concerning a client's credit praiseworthiness or a reassurance as to his capacity to take out the terms of a contract or offering any other reference on behalf of the client.

Again, it should be illustrated that the accountant was neglectful, third parties suffered a financial loss, the financial loss happened as a result of the accountant's negligence and that the accountant know the reason for which his report or accounts were to be employed.

Posted Date: 12/3/2012 5:04:07 AM | Location : United States







Related Discussions:- Liability to third parties, Assignment Help, Ask Question on Liability to third parties, Get Answer, Expert's Help, Liability to third parties Discussions

Write discussion on Liability to third parties
Your posts are moderated
Related Questions
Party Disclosures used by IAS 24 IAS 24 utilized the following related party disclosures that 1. Nature of relationships between subsidiaries and parents, even whethe

Banks under Companies Act Banks are incorporated under the Companies Act like any other business but are granted special privileges under the same Companies Act and subjected t

Deposits and Share - Building Society Shares may make of subscription shares and paid up shares. Interest on shares might be credited to ensure specific control to the account

Existence - Plant and Machinery However this should generally be checked through physical inspection, so a problem arises.  Items of machinery and plant can be numerous mobile

(a) In order to draw reasonable conclusions, an auditor is required to identify and use audit procedures to gather audit evidence. You are required to identify and explain, five

You are just appointed as the Trainee Accountant of the Compaq Computing Sdn Bhd - the newly established company. The manager is facing difficulties in maintaining the manual accou

Simple Trust - This type of TRUST is essential to distribute all its income currently, whether or not the TRUSTEE actually does so and it has no provision in trust instrument for c

Wal-Mart Locate the 2009 Form 10-K for Wal-Mart in Appendix A and consider the following questions: 1. With respect to the report of the external auditors to "the Board of Directo

Timing of Tests of Control - AUDITOR should perform tests of controls over a period of time which is adequate to determine whether, as of the date specified in management's report,

The first work you do in IDEA IS SECTION 2.5. The accounts receivable folder that you are instructed to select on page 25 is a folder that you are to create previously on page 23.