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In the context of a standard unmodified audit report, argue the case for and against the use of a liability disclaimer paragraph.

      

In the context of a standard unmodified audit report, argue the case for and against the use of a
liability disclaimer paragraph.

  

Answers


Kavungya
Case for using liability disclaimer paragraph
• It enables the intended users to understand the situation correctly as it exists in respect of
report issued.
• It helps to bridge the expectation gap by providing the clear indication of the
responsibility of the auditor
Case against using liability disclaimer paragraph
• It can lead to low quality audit since the auditors are protected against. litigation by third
parties
• It can lead to misinterpretation of the matters reported by the auditors
• There is risk that auditors may not exercise due care and diligence because of protection
from the Auditors may not exercise due care and diligence in the course of reporting
since they are aware to be protected by disclaimer.

Kavungya answered the question on May 15, 2019 at 08:53


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