Asked by Ellen Sypolt on May 17, 2024
Verified
An accountant who uncovers suspicious financial dealings in a client's books and fails to investigate or to inform the client is liable for any resulting loss.
Suspicious Financial Dealings
Transactions that raise concerns about legality, often indicating potential fraud or money laundering.
- Gain insight into the responsibilities that accountants bear in detecting and notifying about fraud or inconsistencies in the financial documentation of a client.
Verified Answer
KR
Kayla RodriguezMay 22, 2024
Final Answer :
True
Explanation :
An accountant has a duty of care to their client and a responsibility to exercise due diligence. Failing to investigate or inform the client about suspicious financial dealings breaches this duty and can make the accountant liable for any resulting loss.
Learning Objectives
- Gain insight into the responsibilities that accountants bear in detecting and notifying about fraud or inconsistencies in the financial documentation of a client.