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Part of the book series: Global Financial Markets series ((GFM))

Abstract

Like other professionals such as physicians and architects, auditors are liable both civilly and criminally. Civilly, an auditor can be found liable either under the common law or a statutory law liability. Common law liability arises from negligence, breach of contract, and fraud. Statutory law liability is the obligation that comes from a certain statute or a law which is applied to society. The scope of both common law liability and statutory liability has been expanded to include certain third parties, mainly the foreseen or foreseeable users of audited financial statements. Also, a lawsuit in a state court provides greater protection than the one brought before the federal court.

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Notes

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  8. World Radio alleged damages in the following particulars

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  9. Inability to obtain or raise equity capital for expansion.

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  10. Inability to expand its business by opening new stores and increasing credit lines.

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  11. The making of operating decisions based on false financial information.

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  12. Inability to conduct normal business operations.

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  13. Lost revenues.

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© 2014 Felix I. Lessambo

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Lessambo, F.I. (2014). Auditor Legal Liability. In: The International Corporate Governance System. Global Financial Markets series. Palgrave Macmillan, London. https://doi.org/10.1057/9781137360014_20

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