Question: When an audit clients financial statements are found to be materially misstated due to fraud and the auditor failed to discover the misstatement, what are

When an audit client’s financial statements are found to be materially misstated due to fraud and the auditor failed to discover the misstatement, what are the various potential consequences for the auditor? What are the likely allegations and charges and by whom? How does the capital structure of the audit client impact your answer?

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