{"id":35295,"date":"2024-04-15T09:43:20","date_gmt":"2024-04-15T09:43:20","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=35295"},"modified":"2024-04-15T09:43:20","modified_gmt":"2024-04-15T09:43:20","slug":"for-mis-statement-in-a-company-prospectus-the-auditor-liability-incurs","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/for-mis-statement-in-a-company-prospectus-the-auditor-liability-incurs\/","title":{"rendered":"For mis-statement in a company prospectus, the auditor liability incurs"},"content":{"rendered":"

[amp_mcq option1=”Civil liability” option2=”Criminal liability” option3=”Contractual liability” option4=”None of the above” correct=”option1″]<\/p>\n

The correct answer is: A. Civil liability.<\/p>\n

An auditor’s liability for misstatements in a company prospectus is civil liability. This means that the auditor can be sued by the company or investors who were harmed by the misstatements. The auditor can also be held liable for criminal penalties, such as fines or imprisonment, if the misstatements were intentional or reckless.<\/p>\n

Contractual liability is a type of liability that arises when one party breaches a contract with another party. In the context of an audit, contractual liability would arise if the auditor failed to meet the terms of the engagement letter. However, contractual liability is not typically the main focus of auditor liability lawsuits.<\/p>\n

Criminal liability is a type of liability that arises when a person commits a crime. In the context of an audit, criminal liability would arise if the auditor intentionally or recklessly made false or misleading statements in the company’s financial statements. However, criminal liability is also not typically the main focus of auditor liability lawsuits.<\/p>\n

The main focus of auditor liability lawsuits is civil liability. This is because civil liability allows investors to recover damages for the losses they suffered as a result of the misstatements. In addition, civil liability lawsuits can also lead to injunctions, which can prevent the auditor from engaging in similar conduct in the future.<\/p>\n","protected":false},"excerpt":{"rendered":"

[amp_mcq option1=”Civil liability” option2=”Criminal liability” option3=”Contractual liability” option4=”None of the above” correct=”option1″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[704],"tags":[],"class_list":["post-35295","post","type-post","status-publish","format-standard","hentry","category-legal-aspects-of-business","no-featured-image-padding"],"yoast_head":"\nFor mis-statement in a company prospectus, the auditor liability incurs<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/for-mis-statement-in-a-company-prospectus-the-auditor-liability-incurs\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" 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