[Char143]

This was an example under the topic Negligence subsection *proximate cause* in the Wiley test:

A CPA negligently fails to discover during an audit that diamond rings are missing from the client’s inventory. In fact, an employee stole rings both before and after the audit. The CPA would not be liable for the rings stolen before the audit because it cannot be said that “but for” the accountant’s carelessness the rings would not have been stolen. The CPA would likely be liable for the rings stolen after the audit, however, because successful defalcations by employees are one of the reasonably foreseeable consequences of a defective audit.

Why would a CPA be liable if an employee steals rings after an audit? How is that our (I’m assuming we will ALL be CPA’S eventually) fault?

AUD (2/16)-84
REG (05/16)-69 Retake (7/16)-79 (ty ninja MCQ)
BEC-TBD
FAR-9/8/16

[Anonymous]

Because If CPA were caught the stolen ring during the audit then ring after the audit would not have been stolen.and because of CPA negligence ring is stolen after the audit so CPA is responsible

[Author]

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