73.
Cite specific cases to support your answer to question 1 about the differences between
common law and statutory law legal liability of auditors.
74.
Describe the steps auditors should take to protect themselves against allegations that
fraud went undetected during the audit.
6-51
75.
The following clause was included in the engagement letter between Limits and Lobits,
CPAs (L&L) and Fair, Inc., an audit client of (L&L).
Fair, Inc. agrees to release, indemnify, and hold Limits & Lobits, CPAs (its partners, heirs,
executors, personal representatives, successors, and assigns) harmless from any liability
and costs resulting from fraud caused by or participated in by management of Fair, Inc.
Do you think such a clause is ethical? Use ethical reasoning to support your answer with
reference to professional standards.
