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Good evening I was attempting a question on the above topic however I am very confused .. I took this question to incorporate things like negligence law of tort and contract however, while reviewing the answer it was found to include things like limiting the maximum amount any one can claim, limiting the number of claims made by one individual against the autitor over a given amount of time. Where can I find information on this?
Hi Nerissa – looking at the syllabus I agree that you should be able to explain the liability of auditor under contract and negligence (tort) as you say and the liability of auditor to third parties. It seems you are looking at a question (is it an old one from the exam in an earlier incarnation?) which goes beyond the syllabus as “how does the auditor limit liability?” is not the same as “how does audit liability arise?” or “to whom is the auditor liable?”. Limiting liability is not in F8 in the ACCA qualification but I found an article for you in P7 – https://www.accaglobal.com/uk/en/student/exam-support-resources/professional-exams-study-resources/p7/technical-articles/auditor-liability.html – see the section “Managing exposure to liability” if you’re interested – but you might want to check that it’s really examinable in FAU.
Kim
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