While doing the audit, Brady discovers that Tom, chairman of the board of directors of Shells, is involved in embezzlement of company funds. When confronted by Brady, Tom tells him that he will return the company funds soon. He also pleads with Brady to keep this information secret so that the reputation of Shells will not suffer. Reassured, Brady finishes the audit and issues an unqualified opinion. Six months later, news of the embezzlement surfaces, Tom resigns, and Shells sues Brady. Is Brady liable? Explain.

Answer rating: 100% (QA)

Brady as an auditor has a professional duty to act with integrity and exercise due professional care ... View the full answer