Question: Course: Auditing - Jackson and Co . , CPAs, issued an unqualified opinion on the 2 0 1 8 financial statements of Lake Corp. During

Course: Auditing - Jackson and Co., CPAs, issued an unqualified opinion on the 2018 financial statements of Lake Corp. During 2019, Luke discovered that its Controller had embezzled over $2,000,000. Jackson was unaware of the embezzlement. Luke has decided to sue Jackson to recover the $2,000,000. Luke's suit is based upon Jackson's failure to discover the missing money while performing the 2018 audit. Which of the following is Jackson's best defense? Group of answer choices
That the audit was performed in accordance with GAAS.
Jackson had no knowledge of the embezzlement.
The financial statements were presented in conformity with GAAP.
The controller was Luke's agent and, as such, had designed the controls which facilitated the embezzlement.

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