discussed regarding the possibility of Lakeside Company going public and the ramifications this action would have on their desirability as a client. We have also analyzed Lakeside Company’s financial statements to evaluate the possibility of misstatements. Attached‚ you will find our report discussing these issues. Please contact us with any further questions. Sincerely‚ Mariana Welch Cc: Bob Zimmerman Case Two: New Clients‚ Legal Liability and Materiality Table of Contents
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economic loss case? Was there a breach of the duty of care? Did the breach cause any harm to Jane and Tom? Was the scope appropriate of the negligent person’s liability? Are there any defences available for Philip or 2ZW? Relevant law: Elements of negligence action need to be satisfied on the balance of probabilities: In personal injury case‚ duty of care exists if harm is reasonably foreseeable and reasonable to impose duty on the defendant to take care; In purely economic loss case‚ there should also
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involved in evaluating the net realizable value of inventory. RESPONSIBILITY OF AUDITOR 1. Measure and record transaction data 2. Assess the risk of material misstatement in management’s financial statements 3. Classify and summarize recorded data 4. Obtain and evaluate evidence to respond to risks of material misstatement in the financial statements 5. Evaluate reasonableness of accounting estimates 6. Obtain reasonable assurance that financial statements are presented fairly in
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SOLUTIONS FOR REVIEW CHECKPOINTS 1.1 Business risk is the collective risk faced by a company that engages in business. It encompasses all threats to and organization’s goals and objectives. It includes the chance that customers will buy from competitors‚ that product lines will become obsolete‚ that taxes will increase‚ that government contracts will be lost‚ or that employees will go on strike. 1.2 The conditions of complexity‚ remoteness‚ time-sensitivity‚ and consequences increase demands
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Under the common law‚ accountants may be found liable to the clients who hire them under several legal theories‚ including breach of contract‚ fraud‚ and negligence. Accountants owe a duty to use reasonable care‚ knowledge‚ skill‚ and judgment when providing auditing and other accounting services to a client. In other words‚ an accountant’s actions are measured against those of a “reasonable accountant” in similar circumstances. The development of GAAPs‚ GAASs‚ and other uniform accounting standards
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Week 8 Lecture Aspects of the Tort of Negligence 1. 2. 3. 4. 5. Introduction The general principles of liability for negligence Product liability Liability for negligent misstatement Vicarious liability THE LAW OF TORT (民事侵權法) 1. What is Tort? One party suffers damage or loss as the result of the action of another No need for a contractual relationship The law of tort regulates the behaviour of individuals and legal persons 2 1. Introduction Tort: “Wrong”
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auditing the financial statements of Satyam Computer Services at the time was PW India‚ an affiliate of Pricewaterhouse Coopers. The Securities and Exchange Commission determined that Satyam was able to commit the financial statement fraud due to the negligence of the audit team. The audit team tasked with auditing the records of Satyam failed to confirm cash balances in bank accounts which were grossly over represented. Later it was determined that the more than one billion dollars Satyam claimed to have
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act of 1934 section 18 the plaintiffs have the burden of proof and auditors cannot be held liable for ordinary negligence. They must prove they suffered an economic loss‚ the financial statements contained a material misstatement‚ the loss was caused by reliance on the materially misstated statements‚ and auditors were aware that the financial statements contained a material misstatement. This difference exist because people would buy shares after they know that a company is going bankrupt and in
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Running Head: " Bernard L. Madoff Investment and Securities: A Focus on Auditor ’s Legal Liability and Due Care" "Bernard L. Madoff Investment and Securities: A Focus on Auditor ’s Legal Liability and Due Care" XNAMEXXX New England College Abstract Friehling & Horowitz were the auditing firm that "audited" Bernard Bernard L. Madoff Investment and Securities (BLMIS) for over 15 years‚ while Bernie Madoff ran a Ponzi scheme under their noses. This paper addresses the legal liability
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traffic‚ resulting in hitting and injuring Mason. Therefore‚ his negligence has played a role in the accident. I. Comparative Negligence R. Because Burg’s negligence played a some sort of role (even minor) in the accident‚ one must determine how large of a role was played. Comparative negligence comes into play when many factors are present in a negligent situation. When more than one party is negligent‚ or aids to the negligence‚ the percentage of injuries are reduced. A. Burg would not have
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