L22 Notes_Part_3 - and Audit Risk Business Failure Audit...

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Mitigating Litigation Risk What can the auditor do to reduce the exposure to litigation? A. Peer review B. Defensive auditing What can you do? 1. engagement letters 2. investigate prospective clients 3. comply with GAAP and GAAS, industry expertise 4. quality control C. Role of insurance D. Lobbying for change in laws E. Policy of opposing all lawsuits; Maintain a large in-house staff of lawyers F. Bright Red Lines – specific accounting standards G. Educate users H. Choose clients with low risk (e.g., financial distress) and high integrity I. Recruit and train the best J. LLP
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Business Failure, Audit Failure, Management Fraud,
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Unformatted text preview: and Audit Risk Business Failure Audit Failure Material Misstatement MF Law Common Law Statutory Law Civil Law (Action against another) Preponderance of the evidence Criminal Law (Actions against Society) Beyond a reasonable doubt Intentional Assault & Battery Slander Libel Trespass Fraud Punitive damages Unintentional (negligence) Extent of Carelessness Ordinary Gross (willful and wonton recklessness) Damages to make injured party whole again Uniform Securities Act FCPA 1977 Mail Fraud False Statement Statute RICO SEC Act of 1933 SEC Act of 1934 Contract Law Tort Law...
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This note was uploaded on 10/05/2011 for the course ACG 5637 taught by Professor Monikacaushoulli during the Fall '08 term at University of Florida.

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L22 Notes_Part_3 - and Audit Risk Business Failure Audit...

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