Define negligence as that term has been used in legal cases involving independent auditors. What is the key distinction between negligence and fraud? Between recklessness and fraud? For all three types of professional misconduct, provide an example of such behavior in an audit context.
Answer to relevant QuestionsAssume that the investors defrauded by Nay could have filed their lawsuit against Ernst & Ernst under the Securities Act of 1933. How, if at all, do you believe the outcome of their suit would have been affected?As a general rule, do you believe that “professionals” should be compensated for the overtime they work? Defend your answer.Do you agree or disagree with Olivia’s father that public accountants should keep their professional and personal lives strictly separate? Explain.What type of professional services was PwC providing to the TFG? What professional standards apply to such engagements?Identify the key challenges that the Big Four firms will likely face in their efforts to establish a major presence in the Islamic banking industry.
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