Auditor’s duty of care
A duty of care is a legal obligation to exercise the standard of care owed to a particular person in the circumstances. Whether an auditor owes a duty to a client or a third party depends on applicable law, the engagement and the relationship. A negligence claim also requires consideration of breach, causation, loss and any defence. The precise test varies by jurisdiction.
Worked example
An investor claims to have relied on audited statements; the court considers whether the auditor owed that investor a duty, whether it was breached and whether that breach caused the loss.
Common mistake
Do not assume an auditor automatically owes the same duty to every user of the financial statements.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AAA (INT) | Direct | September 2026–June 2027 |