AUDITING AND ASSURANCE SERVICES A
SYSTEMATIC APPROACH 12TH EDITION
WILLIAM MESSIER TEST BANK FINAL
PAPER COMPLETE SOLUTIONS 2026
GRADED A+
⫸ Auditors may be sued because they are the only party with resources
can be made under the _____________ ___________________ theory.
Answer: deep pockets
⫸ Difference in the diligence that users want auditors to use in detecting
and reporting fraud and the diligence that auditors are able to require to
provide, cause a(n) _________________ _____________ to occur.
Answer: expectation gap
⫸ Which of the following statements regarding common law are
correct? Answer: - It uses legal precedence to identify fault and
responsibility when there is no violation of a written law.
- Jurisdiction is generally a state court in the state where the action
occurred.
- Judges follow a sense of justice or morality when no legal precedent
can be found.
, ⫸ In a(n) __________________ case, the primary basis for a decision is
whether the party's actions have violated the law as written in the code.
Answer: statutory
⫸ Auditor failure to complete the engagement by a specific deadline is
Answer: breach of contract
⫸ Auditors may: Answer: only be sued for economic losses from acts of
fraud committed by a client's employees that a GAAS audit should have
identified.
⫸ Clients may seek legal action against auditors as a result of: Answer:
- substandard performance
- breach of contract
⫸ Breach of contract actions are generally brought against auditors by:
Answer: clients
⫸ When privily of contract exists, plaintiffs must demostrate: Answer: -
the loss was caused by reliance on the financial statements
- they suffered an economic loss
- auditors failed to exercise the appropriate level of professional care
⫸ An unintentional breach of duty owed to another party because of a
lack of reasonable care is called ____________ ____________. Answer:
ordinary negligence
SYSTEMATIC APPROACH 12TH EDITION
WILLIAM MESSIER TEST BANK FINAL
PAPER COMPLETE SOLUTIONS 2026
GRADED A+
⫸ Auditors may be sued because they are the only party with resources
can be made under the _____________ ___________________ theory.
Answer: deep pockets
⫸ Difference in the diligence that users want auditors to use in detecting
and reporting fraud and the diligence that auditors are able to require to
provide, cause a(n) _________________ _____________ to occur.
Answer: expectation gap
⫸ Which of the following statements regarding common law are
correct? Answer: - It uses legal precedence to identify fault and
responsibility when there is no violation of a written law.
- Jurisdiction is generally a state court in the state where the action
occurred.
- Judges follow a sense of justice or morality when no legal precedent
can be found.
, ⫸ In a(n) __________________ case, the primary basis for a decision is
whether the party's actions have violated the law as written in the code.
Answer: statutory
⫸ Auditor failure to complete the engagement by a specific deadline is
Answer: breach of contract
⫸ Auditors may: Answer: only be sued for economic losses from acts of
fraud committed by a client's employees that a GAAS audit should have
identified.
⫸ Clients may seek legal action against auditors as a result of: Answer:
- substandard performance
- breach of contract
⫸ Breach of contract actions are generally brought against auditors by:
Answer: clients
⫸ When privily of contract exists, plaintiffs must demostrate: Answer: -
the loss was caused by reliance on the financial statements
- they suffered an economic loss
- auditors failed to exercise the appropriate level of professional care
⫸ An unintentional breach of duty owed to another party because of a
lack of reasonable care is called ____________ ____________. Answer:
ordinary negligence
