Accounting Chapter 5, Problem 21
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Title: Accounting Chapter 5, Problem 21

Essay Details:

Subject: Business
Author: Lewis M
Date: November 28, 2014
Level: University
Grade: A
Length: 2 / 389

Essay text:

The CPA is normally not liable for failure to detect fraud, irregularities, etc. unless the "normal" audit would have detected it or if the accountant, by agreement, has undertaken greater responsibility such as defalcation audit. In this example situation, Sparks, Watts, and Wilcox are not liable to their clients for breach of contract for failure to find the fraud and for negligence because they did exercise due care in their performance. Donald Sharpe discovered and documented the exceptions he uncovered, and he followed up on the exceptions he found. Sharpe noted the exceptions he found in his working papers and called them to the attention of the in-charge accountant, but the exceptions were dismissed by the in-charge accountant...

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