Asked by Sharath Rajendran on May 20, 2024
Verified
Manufacturing Inc. hires Neri, an accountant, to maintain the company's financial records. Neri does not act negligently or fail to perform any duty but fails to discover that Ollie, the firm's chief finance officer, is embezzling funds from the firm. With respect to the corporation's losses, the accountant is
A) not liable.
B) liable for the entire amount.
C) liable only for the amount that occurred after the accountant was hired.
D) liable only for the amount that cannot be recovered from the embezzler.
Embezzling Funds
The act of dishonestly withholding assets for the purpose of conversion of such assets, by one or more individuals to whom the assets were entrusted, typically to be held or used for other purposes.
Accountant Liability
The legal responsibility of accountants to perform their duties accurately and competently, facing potential legal repercussions for negligence or misconduct.
- Acquire knowledge about the duty of accountants in recognizing and reporting any fraudulent activities or financial anomalies found within a client's financial statements.
- Gain insight into the defensive strategies professionals can employ when accused of negligence or misconduct.
Verified Answer
Learning Objectives
- Acquire knowledge about the duty of accountants in recognizing and reporting any fraudulent activities or financial anomalies found within a client's financial statements.
- Gain insight into the defensive strategies professionals can employ when accused of negligence or misconduct.
Related questions
An Accountant Who Conforms to Generally Accepted Auditing Standards and ...
An Accountant Who Fails to Discover Every Impropriety in a ...
An Accountant Is Least Likely to Be Held Liable for ...
An Auditor Who Accepts a Client's Explanation Regarding Financial Irregularities ...
An Accountant Who Uncovers Suspicious Financial Dealings in a Client's ...